Gerald Lynch
A peak local council body has slammed the decision to limit rate rises this year, while Maribyrnong council says it’s too early to say if it will have an impact.
The local government minister each year sets a local council rate cap limit for the next financial year.
The cap for the 2024-25 financial year has been set at 2.75 per cent, down from the 3.5 per cent cap that was in place for 2023-24. It is still higher than in 2022-23 and 2021-22, which were both under two per cent due to COVID-19.
Municipal Association of Victoria (MAV) president Cr David Clark said this decision shows a review of the system is needed, with councils feeling the financial strain of rapid inflation, staff shortages, and cost shifting.
“Councils are dealing with spiralling costs on multiple fronts. To decrease the rate cap at this time means many councils will be struggling to deliver the services and infrastructure our communities rightly demand,” he said.
“While local government goes backwards by 30 percent compared to CPI since the introduction of the rate cap, the state and federal budgets increase far beyond this. For councils to be stuck at 2.75 per cent is going to be challenging in the extreme.”
Maribyrnong council acting chief executive Lucas Gosling isn’t rushing to any conclusions regarding the new cap.
“While the council is operating in a constrained financial environment, it also recognises our residents are too,” he said.
“With this in mind, council adopted a lower rate cap in its budget for 2022-23… a 2.98 per cent increase in total rates revenue collected rather than the 3.5 percent cap allowed – to support our community to thrive while still delivering quality services our community has told us are important to them.
“Council will consider its position in relation to the application of next year’s rates cap during the budgeting process.”
Hobsons Bay mayor Matt Tyler said the council would work to minimise the impact of rising living costs on its residents.
“Cost-of-living pressures are having an impact across our community. Residents and businesses are feeling the squeeze on their budgets,” he said.
“Against this backdrop, council will continue to balance these pressures on ratepayers with the impact of inflation on the increased costs of building vital infrastructure and delivering more than 100 services our residents rely on.”
Local Government minister Melissa Horne said decisions were made with families at the forefront.
“Fair Go Rates mean households have certainty over their council rates and in 2024-25, the increase will be kept to the forecast inflation rate,” she said.
“The rates cap has made a real difference to household budgets over the past eight years and we’ll keep working to reduce costs for families.”
