Losing control over the ability to set rates from which such a significant portion of a council’s income is derived is undoubtedly a bitter blow.

It is even more galling to those councils across the state that have demonstrated something approaching – by local government standards anyway – prudent fiscal management.

The City of Greater Bendigo’s track record handling the hard-earned money of ratepayers in recent years has not been perfect.

It will be a long time before the expenditure of almost $30,000 on a seat on the corner of Hargreaves and Mitchell streets can be lived down.

There are also question marks over the wisdom of several other expensive projects, such as the $15 million airport upgrade, and whether they will deliver the promised benefits.

But despite some notable failings, it remains true that the City of Greater Bendigo’s financial position is the envy of many of the state’s councils.

A surplus of $10.5 million in the 2014-15 financial year – albeit down from $20.4 million the year before – is not an insignificant achievement.

The Andrews government states it is imposing a cap on rates – commensurate to CPI – in order to put an end to “uncontrolled” rate rises.

There is no doubt some of Victoria’s councils have used their unfettered rate-setting powers to mask chronic mismanagement of ratepayers’ money.

Instead of making efficiencies – or simply taking more care with how they spend the money at their disposal – they go back to the well and slug their citizens ever-increasing amounts. However, as NSW has discovered to its detriment, rate capping is a decidedly blunt instrument in instances where a more surgical approach is needed.

Rather than penalising all councils for the sins of a few, a system allowing councils to retain control over their rates, while giving an independent authority oversight, would be fairer and more flexible.

It is no surprise the City of Greater Bendigo council has decided to abide by the rate cap in the first year of implementation, but it won’t be long before exemptions are applied for. 

- Ross Tyson, deputy editor