Councils mull lifting rates to meet new cap

THE rate cap for Victorian municipalities will rise to 1.75 per cent in the next financial year, but councils in the Geelong region have not officially decided whether they will lift rates by the same level.

Introduced by the Victorian government in 2016, the rate cap limits the amount councils can increase the rate charge to residents each year.

The present rate cap is 1.5 per cent, and Minister for Local Government Shaun Leane recently announced the cap would be set at 1.75 per cent in 2022/23.

City of Greater Geelong acting chief executive officer Guy Wilson-Browne said the city would begin developing its Revenue and Rating Plan for the 2022-23 budget this month.

“The Revenue and Rating Plan will be released for public consultation in late April 2022, before being adopted in June.

“The impact of the rate cap will be assessed against the community’s needs for services and the city’s ability to maintain financial sustainability.

“We are mindful of the need to deliver a disciplined budget that keeps rates low while delivering essential services and infrastructure for our growing community.”

Shire acting general manager governance and infrastructure Gabrielle Spiller said the shire’s Financial Plan 2021-2031 was developed assuming a 1.75 per cent rate increase in 2022-23.

“The increase was forecast factoring in financial savings to be made and ensuring services meet the needs of our community.

“Council will consider adopting a rate increase in June after having gone through the annual budget development process, which includes review of all funding strategies and ensuring the council Plan strategic goals are met.”

A Borough of Queenscliffe spokesperson said the council’s finance team would consider a range of factors, including the rate cap announcement, during the preparation of the budget in the coming months.

“I will say however that the 1.75 per cent rate cap set by the Victorian government is broadly in line with council’s long-term financial expectations and plans.”

The cap is set each year by the Minister for Local Government with advice from the Essential Services Commission, guided by the Consumer Price Index.

The Victorian government says since it began its “Fair Go Rates” system, the present cap of 1.5 per cent is Victoria’s lowest, and residents previously faced an average rate increase of six per cent every year.

“We introduced the Fair Go Rates system to help reduce cost-of-living pressures for Victorians by preventing uncontrolled rate hikes from local councils across Victoria,” Minister for Local Government Shaun Leane said.

“Community members have the chance to engage with their local councils as they make decisions about rate rises through their budget process each year.”

For more information on how rates are set, head to the Local Government Victoria website.