Melton council has told the Essential Services Commission it will face “significant challenges” when rate capping is introduced.
It is also opposed to using the Consumer Price Index as a benchmark to cap rates, saying it has “little relevance” to the costs incurred by local government.
At last week’s council meeting a report on the council’s submission highlighted the risks of rate capping, including operating with deficits and limiting the council’s ability to take on new projects.
“With developer contributions not matching the funds required to build much-needed new infrastructure in the new communities, council will be restricted in raising the required funds to meet these infrastructure obligations,” the report states.
“[There’s a] possibility of leaving council no option other than increasing debt exposure. [This] may restrict the amount of cash available for service delivery in subsequent years.”
Corporate services general manager Peter Bean said different rate caps were required for different councils.
“Melton, being a growth council, should have a higher cap,,” Mr Bean said.
Council is already concerned about funding shortfalls, he said, citing significant challenges to renew existing assets while building services and infrastructure which were needed to “stimulate” the economy.
