The state government’s rate capping policy has cost hundreds of jobs in the western suburbs including approximately 314 employment positions within Wyndham, according to a new report.
The Australian Services Union (ASU) commissioned the Centre for Future Work to complete the report, which stated that the decline in council rates’ revenue has been associated with a corresponding decrease in local government employment and service delivery.
Since 2016-2017, the state government has capped rates that councils can collect from property owners.
The report, authored by economist Dan Nahum, found that rate capping has cost up to 7425 jobs in 2021-2022 across Victoria, counting both direct council employment and indirect private sector jobs.
Apart from Wyndham, the report mentioned that rate capping has also cost up to 636 jobs across the Melton, Hobsons Bay, Maribyrnong and Brimbank municipalities.
Overall, Victorian councils employ about 50,000 people in areas including maternal and child health, aged care, childcare and environmental management.
Victorian ASU secretary Lisa Darmanin said the community was seeing fewer services provided by councils, with more “user pays” fees to cover the funding shortfalls.
According to Wyndham council’s long-term financial plan, the organisation will be responsible for delivering 60-plus services to more than 500,000 residents by 2040.
“The introduction of a yearly rate cap in 2015 limited council’s ability to generate revenue from rates and this creates a major challenge for council in managing its financial position,” the plan reads.
The plan also states that the council council has been forced “to manage the impacts of cost shifting” where state and federal government funding has not kept pace with growth, such as in maternal and child health.
“As a result, council’s employee expense growth is outpacing revenue growth,” the plan asserts.
A Wyndham council spokesperson said: “Whilst rate capping constrains our city’s ability to raise revenue, we continue to find efficiencies to enable us to continue delivering important services to the community.”
A state government spokesperson said: “The government does not determine council budgets and spending priorities, only the annual rate cap which has been set at 1.75 per cent for 2022-23.
“The Fair Go Rates System was introduced to help limit uncontrolled rate hikes and reduce cost-of-living pressures for Victorians.”
