Shires count cost of State Government rate capping policy

Regional shires are counting the cost of rate capping amid an ongoing government inquiry into the policy. 

In a recent submission to a cross bench investigation into the impact of the decision, Campaspe Shire Council claimed the cap would cost it $14 million over the next 10 years.

The state government introduced an indefinite rate cap in December 2015, which it said was in response to uncontrollable rate rises from local governments. 

The cap was set at 2.5 per cent for 2016-17 and 2 per cent for this financial year. 

Similarly, the Central Goldfields Shire Council submitted the cap would mean a $2.3 million loss across the next four years, if the cap was maintained at the Consumer Price Index, which has hovered around 2.5 per cent over the past two years.

The City of Greater Bendigo previously stated it could lose more than $25 million over seven years in the current rate-capping climate, with jobs and services potentially at risk.  

The inquiry has heard from a number of representative bodies, including the Municipal Association of Victoria, whose chief executive Rob Spence said Buloke Shire Council was a “flashing night light” in need of financial support.

“You do not have to be Einstein to know who needs the capacity on rate increases or needs greater grant funding or support from the commonwealth or the state,” he said recently.

“The likes of Buloke and so on. Buloke stands out as the flashing night light of the council in need.”

Buloke Shire Council applied for higher rate cap in 2016-17 – up from 2.5 per cent to 3.05 per cent – but did not this financial year. 

The inquiry will on Wednesday hear from Ratepayers Victoria and the Victorian Local Governance Association.

The City of Greater Bendigo attended a regional hearing for the inquiry last year and is undecided on whether to provide a written submission to the inquiry, the deadline for which is Friday.