By Angela Valente
Macedon Ranges council chief executive Peter Johnston says a Labor pledge to cap council rates is unreasonable and would result in a reduction of services.
Opposition leader Daniel Andrews last week promised the ALP would force councils to cap annual rate increases at CPI if it wins November’s state election.
Under the plan, councils wanting to increase rates above CPI would have to appeal to the Essential Services Commission (ESC).
Mr Johnston’s concerns were echoed by Municipal Association of Victoria president Bill McArthur, who said the plan’s long-term consequences would wreak havoc for
generations.
H
e said rate rise restrictions would leave councils with two choices: reduce services relied on by communities or reduce capital spending to maintain assets.
CPI sits at 2.9 per cent. The average rates bill increase in the proposed Macedon Ranges council budget for 2014-15 is 4.8 per cent. For Hume, it is 4.2 per cent.
Mr Johnston said many costs, including power for street lights and insurance for buildings, increased beyond CPI every year.
“The reality is that some of those significant costs go up way beyond CPI.
‘‘The council tries to keep cost increases as low as possible, but if we don’t have some flexibility to sometimes increase costs, and if rate capping is in place, then the only way to make it work is to reduce some services.
“There needs to be independence of council to allow that to occur.
“If the state opposition is committed to this, maybe what it should do if it
gets elected is to ensure all fees and
charges for all jurisdictions increase no more
than CPI.
‘‘If it wants others to do it, it should lead by example.”
Mr Andrews said the rate capping policy sent a clear message to councils that any increases above CPI must provide clear benefits to ratepayers.
“With the cost of living increasing and Tony Abbott and Denis Napthine increasing taxes, home owners and businesses would have confidence that they aren’t footing the bill for wasteful or unnecessary council spending,’’ Mr Andrews said.
Under last week’s state budget, $2.5 million will be used for projects including the development of a new website giving people the chance to see how their council rates are being spent.
Local Government Minister Tim Bull said ratepayers would be able to use the My Council website to see how their council compared to similar councils, which would help drive improvements across local government.
