The state government’s controversial municipal rate capping policy is being torn apart just months after its introduction.
A cross-party committee of state government MPs, led by Liberal David Davis, has called for the Essential Services Commission to review the policy, which pegs council rate rises to the Consumer Price Index unless the council can make a case to exceed it.
The policy caused considerable angst among councils when it came into effect for their current budgets, including Wyndham, which was one of 10 councils to be knocked back on its proposed budget rate rise for 2016-17.
Mayor Adele Hegedich said the compound effect of rate capping meant growth areas such as Wyndham were being left bereft of vital infrastructure and service funding.
She estimated the rate cap’s cumulative effect on Wyndham beyond 2016-17 would be a funding shortfall of about $50 million over the next four years. This, combined with Wyndham’s annual infrastructure shortfall of about $16 million, compromised council’s financial capacity. Cr Hegedich said she was disappointed the impact of the new rate policy had not been given greater consideration before it was introduced.
A parliamentary committee reviewing the policy last week made recommendations based on 70 submissions from councils and resident groups across Victoria.
Among the recommendations were:
- Announcing the rate cap earlier than December and publishing the reasons for setting it;
- Asking the Essential Services Commission to refine guidelines for variations;
- Supporting small rural councils that lack the resources to apply for variations; and
- Asking the Essential Services Commission to investigate the best way to submit variations.
“It’s important that the government listen to the views of local councils,” said Mr Davis, who is the opposition’s local government spokesman.
