Covering the Goulburn and Murray valleys

Labor proposes council rate cap

Victorian Labor says its policy of rate capping for councils will ease the financial pressure on the state's ratepayers.

DARREN LINTON May 5, 2014 3:30am

Daniel Andrews

Victorian Labor will go to the November election with a policy to introduce rate capping to ease the burden on ratepayers.

It would force councils to keep annual rate rises to the annual inflation figure and to justify any increase above the Consumer Price Index, but the Municipal Association of Victoria has expressed disbelief, describing it as a destructive policy that would wreak havoc for generations.

‘‘Daniel Andrews has effectively endorsed a failed Kennett reform that has hurt ratepayers for two decades and been a key factor in successive rate rises to address crumbling community infrastructure,’’ association president Bill McArthur said.

Under the policy, councils wishing to raise rates above CPI would have to go to the independent Essential Services Commission.

Since 2002-3 Greater Shepparton has averaged rate rises of about six per cent a year, while the average annual inflation rate during the past 11 years was 2.7 per cent.

‘‘Under Labor, councils will be forced to limit rate rises and detail where every dollar will be spent, because ratepayers deserve a fair go,’’ Labor leader Daniel Andrews said.

Under Labor, the commission will determine whether rate increases are fair, and will take into account extraordinary circumstances such as natural disaster, other sources of income and continued maintenance of essential council services.

If the commission believes the rate rise is unreasonable, it will recommend to the Local Government Minister the increase be blocked.

The commission already regulates pricing for gas, water and electricity in Victoria.

‘‘This policy also sends a clear message that we expect councils to keep their rates in line with CPI, any increases above this must provide a clear benefit to ratepayers,’’ Mr Andrews said.

An amendment to the Local Government Act would require draft budgets be submitted to the commission before they are adopted.

Opinion — page 8

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