THE Gannawarra Council will face a new rate cap of 1.75 per cent for the 2022/23 financial year, a small increase on last year.
Minister for Local Government Shaun Leane recently announced the cap, which will replace the current 1.5 per cent cap under the Victorian Government’s Fair Go Rates system.
The Fair Go Rates system began in 2016 to limit uncontrolled rate hikes and to provide councils with a clear framework to guide their budgeting while ensuring essential services continue to be delivered.
Gannawarra Shire Council Mayor Charlie Gillingham said the new cap was “reasonable” and allowed council to manage its finances accordingly.
“The 0.5 per cent increase will make very little difference to our finances,” he said.
“Although revenue from rates are very important, funding through government grants gives us the necessary funds to build and maintain assets, as well as provide our core community services.”
Cr Gillingham said he supported the rate cap system as it “prevents any significant rate increases imposed on our community as a whole, as was occurring in some neighbouring councils in the past”.
Asked what impact the cap had on delivering council services, Cr Gillingham said “minimal” as it sourced other funding streams.
“Rate income amounts to around 30 per cent of our adopted budget revenue with council mainly dependant on government grants to fund services and functions,” he said.
Cr Gillingham said although the cap had very little consequences to operations, they were “constantly managed and reviewed accordingly”.
“Council has the community’s best interest at heart and understands that payment of rates can sometimes be contentious, but we are very fortunate to live in such a wonderful area with fantastic amenities for all to enjoy.
“Whilst the rate cap set is on the total rates collected by council, it does not prevent individual rate assessments from varying above or below this number.
“As we know, property values are assessed annually and rates are calculated on the current capital improved value of your property.”
The cap is set each year by the Minister for Local Government with advice from the Essential Services Commission, guided by the Consumer Price Index.
Before the Fair Go Rates system was introduced residents faced an average rate increase of 6 per cent every year and the current rate cap of 1.5 per cent is the lowest since the system was first introduced.
Gannawarra Council’s rate cap was set at 2.5 per cent in 2016-17, 2 per cent in 2017-18, 2.25 per cent in 2018-19, 2.5 per cent in 2019-20 and 2 per cent in 2020-21.
The council collects rates from residents annually to fund and deliver essential community infrastructure and services such as local parks, libraries, community centres, roads, kindergartens, waste collection and sports grounds.
Councils individually set rates for their municipalities every year through their budget process and must consult with their communities on decisions relating to budgets, rates, and other charges.
Mr Leane said the Fair Go Rates system is to help reduce cost-of-living pressures for Victorians by preventing uncontrolled rate hikes from local councils across Victoria.
“Community members have the chance to engage with their local councils as they make decisions about rate rises through their budget process each year,” he said.
Ratepayers Victoria spokesperson Verity Webb said the rate capping system was a “confusing farce that will no longer be tolerated”.
“It is unjust and unjustifiable to keep charging taxes based on the value of our homes and council spending wish lists, which ratepayers have absolutely no control over,” Ms Webb said.
“As we look toward this new election year, ratepayers in Victoria are demanding more respect, less rhetoric and lower rates, and we will vote accordingly in November.”
Ms Webb urged Mr Leane to put pressure on the local government sector to clearly state that ratepayers experiencing financial hardship could apply to have their rates reduced or excused.
“These are our homes. We’re sick of being treated like personal banks for council CEOs,” she said.
“After two years of being told that we are all in this together and we all have to help each other, it’s sad that ratepayers are just treated like an endless supply of money.”
