Council rate rise cap doubles

January 26, 2023 BY

Local Government Minister Melissa Horne. Photo: FACEBOOK

RISING cost pressures are being cited by the region’s councils ahead of an expected rate rise from them later in the year.

Two days before the new year, the Victorian government announced it was doubling the amount local government could lift rates in the 2023/24 financial year, bumping the cap up from 1.75 per cent to 3.5 per cent.

In response to questions about whether the rise would be passed on in full, both the Surf Coast Shire and City of Greater Geelong referred to the increasing costs of service delivery.

Surf Coast Shire mayor Liz Pattison said the shire welcomed the rate cap “that goes some way towards recognising the extraordinary cost pressures councils are facing”.

“We are also aware that ratepayers are facing higher cost of living pressures.

“Like all councils, increases in the costs of delivering services and infrastructure are significantly outstripping our ability to generate income.

“The current financial year is particularly tough, with prices of materials and services rising anywhere from five to 25 per cent compared with the government rate cap of 1.75 per cent.”

Cr Pattison said the ongoing disparity between the amount the shire could charge ratepayers for services compared with the actual cost of implementing them was unfeasible.

“We expect that council will have to make some hard decisions in coming years to ensure services are sustainable into the future.

“The new rate cap will help council develop its 2023/24 budget, including determining its proposed rate increase.”

City of Greater Geelong acting chief executive officer Kaarina Phyland said the city was similarly weighing up how it would continue to balance community needs with its financial stability.

“The 2023/24 budget shapes as a challenging one for the council, with rising costs across the board – and especially in the construction industry – having a significant impact.

“Our aim will be to deliver a budget that balances the need for us to remain financially sustainable in a difficult economic environment, while continuing to provide facilities and services to support a growing community.”

Borough of Queenscliffe mayor Isabelle Tolhurst said the borough was yet to make a decision on whether to charge ratepayers 3.5 per cent extra, and “will do so in preparing our budget and considering our financial position”.

“But the recommendation from officers is to pass on the rate cap in full,” she said.

Municipal Association of Victoria (MAV) president Cr David Clark said the MAV was continuing to call for an independent review of the way the cap is allocated.

“Each year, councils spend between 20-40 per cent of their budgets on new infrastructure, be that roads, aquatic facilities, streetscapes, or playgrounds and parks.

“In the current year costs for these works have escalated in the order of 35 per cent, something the rate cap doesn’t deal with, hence the need for the review.”