City of Greater Bendigo is set to lose out on $1.7 million of council revenue after the state government tabled legislation to cap local government rates.
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Minister for Local Government Natalie Hutchins said the Fair Go Rates system would put an end to uncontrolled rate hikes.
She said the caps would give ratepayers greater value for money while ensuring councils remained financially sustainable.
But City of Greater Bendigo CEO Craig Niemann said the legislation could jeopardise the projects and services local government delivers to residents.
“That's the key question, about council’s ability to upgrade and maintain infrastructure at the level community expects,” Mr Niemann said.
He said the council’s long term financial plan named increases of 5 per cent, but last year the council rose rates by 4.75 per cent.
Under the state government scheme, this would be capped at 3.05 per cent for Bendigo in 2016-17, using the consumer price index and a wage price index as outlined in the Essential Services Commission report.
Mr Niemann said while council was still dissecting the recent report, they expected that gap to amount to $1.7 million.
Mr Niemann said it was “challenging” for the state government to intervene and determine a council’s revenue stream, saying that “local government is elected to make those decisions”.
“I'm sure no one wants to pay more rates, but they will want to enjoy the facilities and services,” he said.
“Getting that balance right is a decision for the council, and it’s one they make every year.”
Mr Niemann’s figures are slightly out of step with new data from the Victorian government – he said his figures refer to general rates, which can become complicated by other rates, like waste.
City of Greater Bendigo saw a rate rise of 5.1 per cent for 2015-16 according to the government’s data, a dramatic drop from the 8 per cent rise the year prior.
Mount Alexander Shire council had a 4.5 per cent rise, but saw its steepest rise in 2010-11 with 10.2 per cent.
Victorians faced an average 6 per cent increase each year over the past decade.
The Municipal Association of Victoria warned similar caps in NSW had “devastated the local infrastructure”.
If council has a project that requires it to go above the rate cap, it will need to apply to the ESC.
