However, the City of Ballarat argues that the prospective changes could come at the expense of vital infrastructure for the region. 

The pre-election promise comes almost a year after the City of Ballarat increased rates by 7.5 per cent for the 2013-14 financial year. 

The state opposition announced on Sunday that it would implement the new policy to give ratepayers “a fair go” if it were victorious in the November election. 

State Labor promises to cap rates at CPI, which currently sits at 2.9 per cent, to help reduce the cost of living expenses. 

Local governments will need to justify any rate increases with the Essential Services Commission (ESC).

The ESC has the power to recommend to the Minister of Local Government that a council rate increase should be blocked. 

City of Ballarat Mayor Joshua Morris said while the council supported a reduction in cost of living expenses, he was concerned about linking the rates cap to CPI. 

“When we look at the real costs councils are facing, they are not linked to CPI or inflation,” he said. 

Cr Morris said rate revenue accounted for 50 per cent of the City of Ballarat’s budget and had raised $80 million in revenue for the last financial year. 

“We are always working with the state and federal government to find sources of extra funding for the many needs the community has,” he said. “If (they) are pulling money out of our budget and we are going to continue to deliver services, then we will have to find the money somewhere else.”

Ballarat West member Sharon Knight said ratepayers were being slugged twice under current council rate hikes.

“They have to pay their increased rates and pay a bit more for a meal out and for local goods and services,” she said. 

“It is time to do something about the council rates, the wasteful spending and the lack of transparency,” she said.

kara.irving@fairfaxmedia.com.au