Rates rise cap a risk to local gov staff, services


The Hamilton Spectator – August 18, 2015

THE State Government’s proposed rates cap will cause “long-term unsustainability” and cuts to staff or services from local governments, according to Southern Grampians Shire Councillor Dennis Dawson.


Cr Dawson made the comments during a debate on how to respond to the State Government’s latest round of consultation, which took place in Wednesday’s council meeting.

Cr Katrina Rainsford said she supported the rates capping policy as a way to make local governments more “efficient and effective” but criticised the State Government for increasing its own levies by seven per cent.

Cr Paul Battista also supported the rates cap but said he was concerned that it would increase the Shire’s vulnerability to unexpected large costs, such as superannuation blowouts or natural disasters.

The actual motion was only to note the release of the Essential Services Commission’s ‘A Blueprint for Change’ draft report and provide the Shire’s response by August 28.

The report set out the State Government’s review into how it would impose rates capping and deal with applications for an exemption by local governments.

Southern Grampians Shire Council voted unanimously to note the report and prepare its response.

Shire services director Bronwyn Herbert told councillors that the report was “very important for all councils across Victoria” as the Essential Service Commission would determine if certain shires could get exemptions from the cap.

“This report takes in all those submissions and presents a model for rate capping in the future,” she said.

“It needs to be considered very seriously.

“Tonight is not about discussion particular views or ins and outs of the policy.”

Despite Ms Herbert’s request the debate turned to the rates cap policy itself.

Cr Dawson said he was concerned that rate payers would be confused by rates and some charges being capped while others were not.

Cr Dawson was also concerned that rate payers would believe the cap would still be at the Consumer Price Index inflation rate rather than the new proposal to base the cap on an amalgam of financial forecasts.

“I think these distinctions are going to create confusion for people who relate to the whole cost as detailed in the rates notice,” he said.

Cr Dawson said the rates cap would have the potential to fundamentally change the relationship between local governments and their communities.

“One of the downsides of this proposal is that it has the strong potential to end the cross-subsidisation of council activities,” he said.

“We do cross-subsidise council activities in the community interest to make services available at reasonable prices.

“I think that rate capping will push councils towards a full cost recovery models for some services and will take away that supportiveness of cross-subsidisation.

“It ensures that we continue to be motivated by money rather than the sense of community responsibility and community support.”

Cr Dawson said he believed that rates capping would affect waste services, home help, meals on wheels, recreation services and “services to help less advantaged members of community”.

Cr Rainsford said shires need to have a “finger on the pulse” and recognise that people in business and farming “are doing more with less”.

“I’ve served on council for a long time and I haven’t seen the political will for councils to collectively, at times, say ‘no’,” she said.

“It’s not about not continuing to provide services, it’s about actually reflecting the general community as a lot of people out there don’t get five to six per cent rises each year in their pay packet.”

Cr Rainsford did criticise the State Government’s policy of increasing the levies that it requires local governments to collect.

“We have got a government that talks about the cost of living but it’s not going to worry about the fire services levy, which people are linking to their rates notices,” she said.

“They have put the levy up by seven per cent while at the same time talking about rate capping.”

Cr Albert Calvano said the shire needed to make note of the close deadlines for preparing its draft budget and any application for a rates cap exemption.

Cr Battista said he welcomed the rates cap but noted that it could increase the impact of possible “unexpected monetary issues” in the future.

“For to long many councils throughout Victoria have set their rates at a very large level and communities have been saying ‘we can’t afford it any more’,” he said.

“It is going to make us more responsible with our budgets and make sure that we get the process right by what we put forward to the community.

“I think we will work hard and maintain our services.”