Macedon Ranges council has flagged reductions in planned works and services allocations in its 2017-18 budget after the state government imposed a rates cap of two per cent for next financial year.
The cap, which was set by Local Government Minister Natalie Hutchins last month, prevents the council from raising its rates by more than two per cent. This year’s cap was 2.5 per cent.
Ms Hutchins said the permitted rate rise for 2017-18 was in line with the Consumer Price Index and would make things fairer for ratepayers.
But council chief executive Peter Johnston said the reduced cap would result in a reduction in planned rate income, meaning the council would be able to spend less money on works and services.
“We know that there will have to be a reduction in some works and services in order to comply with the rate cap,” he said.
“Council will carefully consider the financial impacts of rate-capping on our community, environment and infrastructure and, as usual, we will seek community input on the draft budget during May.”
Hume council chief executive Domenic Isola said his council would consider the impact of the cap on its budget throughout the year.
The Municipal Association of Victoria has warned the government that the cap will impact council services across the state. Interim president Coral Ross said councils would struggle to meet their community service and asset renewal obligations.
“Councils did well to protect communities from service cuts last year,” Cr Ross said. “However, this will inevitably become harder, as the cost of delivering services and meeting local infrastructure renewal needs do not reflect the Consumer Price Index, which the government has used to set its rate cap.
“The two per cent cap comes on top of decades of cost shifting from state governments and a 2.5 per cent cap last year.”
