Wyndham council is still to decide whether to apply for a higher-than-inflation rate rise after the state government passed rate-capping legislation last month.
The government will cap council rate rises across Victoria at 2.5 per cent for the 2016-17 financial year as part of an election promise to cap rate rises at the consumer price index.
State Local Government Minister Natalie Hutchins said the rate cap would put a stop to uncontrolled rate rises and increase the transparency and accountability of Victorian councils.
“The fair-go rates cap doesn’t stop councils from taking on new projects,” Ms Hutchins said. “Instead, it ensures councils are listening to local residents and responding to their needs.”
Councils have until March 31 to apply to the Essential Services Commission for higher rate rises. Wyndham acting chief executive Bill Forrest said the council would decide in coming weeks whether or not to apply.
“Wyndham City is currently considering a number of factors regarding applying for a variation, including the valuable feedback received from community panel workshops undertaken late last year,” Mr Forrest said.
“[Our] long-term plan outlines an annual increase of 5.5 per cent for rates and charges to manage the increasing needs of our growing population and provide necessary infrastructure and services.
“The state government’s cap of 2.5 per cent will mean a shortfall in the budget of approximately $5 million for the 2016‐17 financial year … this will compound to a shortfall of approximately $50 million over the next four years.”
Wyndham council imposed a 5.5 per cent rate increase in the 2015-16 financial year – the highest rate rise of any council in Melbourne’s western suburbs.
Municipal Association of Victoria president Bill McArthur said independent and government studies about rate-capping imposed in other areas revealed the capping led to reduced spending on community infrastructure.
