Colac Otway Shire Council has called on the State Government to recognise the needs of rural Victorians by applying a different rate capping model to country and city councils.
Council’s submission to the Essential Services Commission advocates strongly for an alternative rate capping model for rural councils that reflected their unique needs.
Mayor Frank Buchanan said that applying a blanket cap across the local government industry would significantly disadvantage rural communities.
“While regional cities and metro councils can access other revenue streams such as parking fees and fines, there is little to no scope to do this in rural areas.
“Rural municipalities have more infrastructure to maintain than our city counterparts, for example, we maintain 1632 kilometres of local roads and 134 bridges and culverts. As a comparison, the City of Port Phillip maintains 288 kilometres of local roads.
“If the final rate capping model fails to differentiate between city and country, Colac Otway and our fellow rural councils will have to cut expenditure and as a direct result, local services and local jobs.”
Colac Otway’s submission to the Essential Services Commission, endorsed by Council at its August meeting, responded to 11 draft recommendations.
Council generally supported most recommendations, including those that addressed what charges should be subject to the rate cap; how the cap should be applied; that councils should have discretion to decide when they apply for a variation to the cap; and that after 2016-17 councils could apply for multi-year variations to the cap.
However Council disagreed with the methodology to calculate the rate cap, arguing that the consumer price index was not a true measure of the annual cost increases experienced by councils.
Cr Buchanan said Council also disagreed with a proposed efficiency factor, because rate capping itself was an efficiency measure.
The August report to Council stated that in the first year of rate capping Council’s revenue would reduce by $500,000 and in 2025, Council’s revenue will be $9 million worse off.
Cumulatively, the report estimated, the first 10 years of rate capping will cut $35 million out of Colac Otway’s budget.
Cr Buchanan said that even before rate capping was floated, Council strived to provide value for money services to its ratepayers.
“As a council we feel strongly that any model used has to differentiate between metropolitan and city councils.
“Victoria’s 39 rural councils are already running lean operations, and applying the same cap to metro and rural councils is only going to further disadvantage country areas and risk the future sustainability of some councils.
“The aim of our submission is to ensure the Essential Services Commission gets the final model right, for the ultimate good of our community.”
