RATEPAYERS could be hit with a new levy to cover the cost of state Labor policy.
Labor is taking a policy to November 29’s state election to have local government rate rises no higher than the increase in the consumer price index.
Any council wishing to raise rates beyond the cap would need to justify the move to the Essential Services Commission.
Shadow local government minister Richard Wynne said the additional powers of the ESC, which already examined prices for the water, sewerage, electricity, gas, ports and rail freight industries, would ensure councils were properly managing their budgetary responsibilities, and not hitting ratepayers with unsubstantiated or excessive rate increases.
“Only Labor will require councils to justify rate increases before an independent umpire,” he said.
When the policy was launched, Opposition Leader Daniel Andrews said councils would be forced to limit rate rises and detail where every dollar will be spent.
“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,” he said.
“With the cost of living increasing and Tony Abbott and Denis Napthine increasing taxes, homeowners and businesses can have confidence that they aren’t footing the bill for wasteful or unnecessary council spending.”
However, the Municipal Association of Victoria, the peak body for local government in Victoria, is vowing to lobby against the policy.
MAV president Bill McArthur said a charge, similar to the Fire Services and Environmental Protection Authority levies, could be attached to local rates notices.
“You’ll have to employ a whole new bureaucracy to understand the budgetary process. Someone has to pay for a new super-bureaucracy,” he told the Gippsland Times.
“Someone has to pay somehow.”
Cr McArthur said the capping of rates could lead to the loss of local services.
“Often with rate capping the first thing to go is services,” he said.
“A rate rise often causes public angst, but you take away services, that causes public outrage.
“There are checks and balances already in the system, but why you need a regulator who doesn’t understand the local government budgetary process is beyond me.”
Highlighting the concern, Labor’s own election platform states the party wants to ensure local government has autonomy, independence and community ownership.
Wellington Shire Council has been opposed to the policy since it was announced in May.
This week councillors voted to add a commitment to oppose the Labor policy to the MAV’s election priorities.
Cr Malcolm Hole said the policy would get “someone else to control our budgets”.
“The impact is that it’s going to cost local government about half a million dollars to put together a four-year budget to present to the Essential Services Commission,” he said.
“We, as councils around Victoria, will probably not get the opportunity to build it into our rates because we won’t know whether our budget has been accepted or not before the Essential Services Commission rules it in.
“Where do we find the extra half a million dollars?
“In all probability it’s going to show up on the rates notices as a state government levy, because the state government will take our autonomy to somebody else to declare what we can and what we can’t do.”
Cr Hole said councils should be able to provide ratepayers and residents with the best possible services at the best possible price to meet the community wishes.
“We need to have local government in control of its own finances,” he said.
Cr Peter Cleary said rate rises should not be judged against the increase in the CPI as councils did not buy items such as bread and milk, these and similar items used to calculate the CPI.
“The elected representatives of this shire won’t make the decision on how much we should increase our rates, that will be done by the Essential Services Commission,” he said.
“I am firmly of the belief that this shire does show leadership and show restraint in our rates increases.”
