A Loddon Shire councillor has questioned the accuracy of a 10-year financial plan for the municipality, saying the end result "won't even be close" to the real figures.
Cr Gavan Holt made the comment as council discussed the adoption of its Financial Plan from 2022/23 to 2031/32 during its monthly meeting on Tuesday.
With high inflation and a rate cap set at 1.75 per cent, Cr Holt expressed his concern about the value of compiling a financial plan covering 10 years.
"We are required to do a long term financial plan, we can't avoid that," Cr Holt said.
"But it is not a very exact science."
Cr Holt said in preparing the document, the shire's financial officers had to make some assumptions around rate capping.
He said the rate cap of 1.75 per cent was set by the Victorian Government on a formula which considers the consumer price index (CPI) and wage index.
"And as we all know with what is happening at the moment, in keeping with the worldwide trend, the inflation rate in Australia is running at around 5.5 percent and is expected to go higher," Cr Holt said.
He also pointed out the Fair Work Commission had recently granted a "considerable pay rise to our lowest paid workers".
Cr Holt believed these financial pressures were conspiring to skew council's financial estimates going forward.
"If you look at our rates and charges figures for next year, if the same formula for the rate cap continues to be used, it will already be out by hundreds of thousands of dollars," Cr Holt said.
"If you look at what this is saying and what actually is the situation in Loddon in 10 years time, it won't even be close."
Cr Holt said council's projected rate revenue in the financial plan for 2031-32 was $16.3 million.
"If we had a rate cap figure of five per cent, it would be $20 million," he said.
"By the way, that $20m would only buy what $13 million would buy now."
Cr Holt said said he was a far stronger supporter of shorter tern term financial plans
"They are closer to reality," he said.
Despite his comments, Cr Holt supported the adoption of the 10-year financial plan.
"Our financial team have based it on information at their disposal and have done the best they can to plot Loddon Shire's ongoing financial position," he said.
Mayor Dan Straub said it was a "very informed document" but recognised the difficulty mapping out a 10-year plan.
"It's a very hard undertaking setting out a plan like this," he said.
"It's all forecasts and assumptions and variants do change as we move forward."
He praised the council finance team members for their efforts in presenting the plan.
Council voted to adopt the financial plan as well as the 2022/23 Budget and Fees and Charges Schedule.
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