The state government must streamline the rate cap variation process to reduce costs on the ratepayer, a parliamentary committee has recommended.
The committee reported that Moorabool council had spent $60,000 to apply for a rate rise above the cap.
The committee last week released its third report into the rate-capping policy and noted that many councils had expressed concerns about the “expensive” process of seeking a rate cap variation while also being asked by the state government to reduce their expenditure.
As part of a consultation process, Moorabool council spent $25,000 on staff costs, $20,000 on a telephone survey and $13,000 on direct mail, advertisements and information sheets on rate capping.
It was successful in applying for a 3.5 per cent rate rise – one per cent higher than the state government-imposed 2.5 per cent cap.
Committee chairman David Davis said the Essential Services Commission’s rate variation process needed to be streamlined.
“We found the variation process has been cumbersome, costly and intrusive,” Mr Davis said. “It is clear that reform on this process needs to occur.”
Mr Davis said rural councils were also concerned about losing access to vital infrastructure funding, including the country roads and bridges program.
Moorabool chief executive Rob Croxford said that while the council was successful in applying for a rate cap variation for 2016-17, it was still deliberating whether it would apply for additional variations in future.
“The rate cap variation delivered council an additional $259,000 in rate revenue in 2016-17 and improved Moorabool’s financial stability so that council was prepared to increase borrowings and fund an additional $400,000 on new and upgraded projects,” Mr Croxford said.
“The projects funded by this additional $400,000 were the Masons Lane western pavilion design works ($75,000) and the [shared paths] at Station Street, Maddingley ($325,000).”
Local Government Minister Natalie Hutchins said: “Community consultation on budget settings is core business for councils and shouldn’t be an added extra just because they want to try and exceed the rate cao.
“Victorians voted for this policy and we are delivering it.”
