By JESSE GRAHAM
YARRA Ranges Council will be forced to strip back rate rises next year under a government plan to reduce “unnecessary” revenue-raising by councils across the state.
But the council has said it’s unsure what the changes will mean for council projects, such as its $33 million Capital Works program, with consultation yet to begin on the changes.
On 5 May last year, Labor announced that it would force councils to cap their rate-rises at the Consumer Price Index (CPI) and that any further increases would need to be approved by the government.
The move, according to now-Premier Daniel Andrews, was to ensure councils detailed where every ratepayer dollar would be spent and to give residents a “fair go”.
“This policy also sends a clear message that we expect councils to keep their rates in line with CPI, any increases above this must provide a clear benefit to ratepayers.”
Yarra Ranges Council’s Director of Corporate Services, Troy Edwards, told the Mail that the impact the move could have on the council was unclear.
“The challenge, for us, is that we don’t know what it means,” Mr Edwards said.
“It would reduce the amount of revenue we’d raise, no doubt about that, but we’ll work through how we handle that as an organisation – whether through operational costs or the range of programs we deliver.”
In the 2014-’15 financial year, the council enforced a rate-rise of 4.8 per cent – CPI at the time was 2.8 per cent.
Rate rises in the Yarra Ranges are scheduled to continue at 4.8 per cent for the following three years, but that could change under Labor’s capping plan, which will begin for the 2016-’17 year.
With the adoption of the council’s budget in mid-2014 was a proposed Capital Works Program, which will see around $33 million spent on infrastructure upgrades and developments.
Deputy Premier and Monbulk MP James Merlino told the Mail that some councils had been increasing their rates at two or three times the rate of inflation, and the capping would be a “sustainable and responsible” approach to rates.
“Under these changes, rates will be capped and councils will need to justify their spending,” Mr Merlino said.
“The cap will begin in 2016-’17, with exemptions to be considered by the Essential Services Commission – unnecessary rate rises before then could affect council’s applications for future exemption.”
Mr Merlino said the government would consult with councils and their representatives in the lead-up to the cap being enforced.
