The City of Greater Bendigo will not push to raise next year’s rates above the state government cap announced this week.
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Local government minister Marlene Kairouz has revealed the average rate cap for the 2018/19 financial year will be set at 2.25 per cent.
The figure represents an increase of one-quarter of a percentage point from the 2016/17 cap but is 0.25 per cent lower than in 2015/16.
A spokeswoman for the City of Greater Bendigo said on Thursday the municipality would not apply for the right to charge ratespayers in excess of the cap.
Chief executive officer Craig Niemann explained the figure would “provide guidance” to the local government as developed the budget for the forthcoming year. He did not say, however, whether the entire 2.25 per cent increase would be passed on to Bendigo ratepayers.
“The city’s draft 2018/2019 budget has been modelled on a similar rate rise,” Mr Niemann said.
“The draft budget is in the early stages of development, so it is too soon to determine the final rate rise.”
Victoria’s 79 councils have until March 31 next year to request a rate increase if it considers the figure insufficient for its needs.
The capping system was set up in 2015 in response to what the state government believed was unfair increases in rates.
At the time, Victorian rates were rising about six per cent every year.
Between 2008/9 and when the caps were introduced, the City of Greater Bendigo rose rates by an average of 5.2 per cent annually.
Bendigo’s decision to abide by the cap comes despite its submissions to a crossbench inquiry into the system.
In a letter to the lesgislative council committee, Mr Niemann said councils were being given more responsibility without adequate financial support.
“There is no doubt that the rate capping regime has implications for the ability of councils to operate independently on behalf of their local communities,” he wrote.
He has also estimated the capping system could leave the council $194 million short over the next 10 years.
In his letter, the CEO asked Ms Kairouz to set different rate caps for each council depending on its needs.
“As the rate capping regime evolves, effort should be put into developing a realistic and meaningful cost escalation measure for service and project delivery in the local government context.”
According to Muncipal Association of Victoria CEO Rob Spence, that option lacked political will, with ratecapping a central tenet of the state Labor party ahead of the 2014 election.
