Moorabool council is concerned that the state government’s 2.75 per cent rate cap for the next financial year will make it “increasingly difficult” to provide services and infrastructure.
Local Government Minister Melissa Horne announced the rate cap of 2.75 per cent for 2024-25 under the Fair Go Rates system.
The rate cap for the current financial year was set at 3.5 per cent.
The government accepted the recommendation of the Essential Services Commission regarding the cap, which it said is equal to the forecast Consumer Price Index for 2024-25.
Moorabool council chief executive Derek Madden disagreed that the rate cap is in line with inflation.
“Inflation is currently running at five per cent and is likely to remain higher for longer than previously expected, according to experts and the RBA which will be a worry for many,” he said.
“Council recognises the environment we are operating in and is aware of the cumulative impact the setting of the rate cap below CPI for the last number of years is having on the services we offer.
“Council believes setting the rate cap well below inflation may not be good practice and will make it increasingly difficult for rural and regional shires in particular to sustain the level of services and infrastructure that ratepayers demand in the face of rising costs.”
Mr Madden said that despite this, the council recognises the financial challenges that residents face and will do its best to work within the parameters that have been set while advocating strongly for the state to provide grant support as needed.
“However, meeting the community’s expectations in investment in key areas such as road and asset maintenance becomes increasingly challenging in a low-rate cap environment where severe weather events have had repeated devastating impacts,” he said.
Melton council chief financial advisor Peter Leersen said council has not met since the rate cap was announced and will discuss it next month during preparation of the 2024-25 Council budget.
“Ensuring rates are kept as low as possible for residents, particularly in difficult economic times, is always at the forefront of council’s decision-making when preparing the budget,” he said.
Ms Horne said Fair Go Rates mean households have certainty over their council rates and in 2024-25, the increase will be kept to the forecast inflation rate.
