Wyndham ratepayers have rung in the new year with the news that council rate rises will be capped at Consumer Price Index (CPI) for the second consecutive year.
But Wyndham council has voiced its concerns at the move.
The state government confirmed late last month that it would cap council rate rises at two per cent, in line with the CPI, for 2017-18. This year’s cap was 2.5 per cent.
Local Government Minister Natalie Hutchins said that before the state government imposed rate capping, council rates were going up by an average of six per cent each year.
Councils have until January 31 to apply for variations to the cap.
Wyndham council acting chief executive Kate Roffey would not confirm or deny whether the council would apply for a variation.
Ms Roffey would not specify what impact the rate cap would have on the 2017-18 budget, but according to last year’s submission to the Essential Service Commission, the council estimated that rate capping could result in a $36 million loss of capital funding over four years.
“Over the next six months, we will be developing the 2017-18 budget and rate capping will undoubtedly have some impacts, which we will work through during this time,” she said.
“We continue to be concerned about the long-term impacts rate-capping will have on the provision of vital community infrastructure and services.
“As one of Australia’s fastest growing municipalities, it’s even more important to ensure existing and new residents are not deprived of the services they need.”
The council was unsuccessful in gaining a variation on the rate cap for 2016-17, with the ESC determining that the council had the financial capacity to find funding alternatives and expenditure offsets.
As a result, the council cut about $3 million from its proposed 2016-17 capital works spending.
Municipal Association of Victoria interim president Coral Ross blasted the state government’s decision on rate-capping.
“Under a two per cent rate cap, many councils will struggle to meet their community service and asset renewal obligations next year,” she said.
