REGIONAL and rural councils across the state have expressed their concerns at the incoming rate caps to be enforced by the state government, with a quarter of all councils expressing interest to apply for an exemption.
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Of the 20 councils who have expressed interest in avoiding the 2.5% per cent rate cap, 15 of those are regional or rural councils. The City of Ballarat, Hepburn Shire, Moorabool Shire and the Pyrenees Shire are all included.
City of Ballarat mayor Des Hudson said the imposed cap would have a dramatic affect on the council’s ability to deliver on services and projects which had previously been factored into the budget.
“We had set a financial plan for the life of this council where we could factor in rate increases,” Cr Hudson said.
“To not go down the line of applying for an exemption would be us not showing a commitment to those projects.”
In previous budget estimates the City of Ballarat council had factored in a rate cap of 5.5 per cent, well above the 2.5 per cent to be enforced by the government.
Cr Hudson said the rate cap had particular impact on regional and rural councils who did not have the same revenue stream as their metropolitan counterparts.
“(Regional and rural councils) don’t have the diversity of services or fees they’re able to collect,” Cr Hudson said.
“They really rely on their rate base.”
The 2.5 per cent cap is tied in line with the Melbourne Consumer Price Index (CPI), and is set to be enforced at the beginning of the 2016/17 financial year.
Pyrenees Shire mayor Michael O’Connor reiterated Cr Hudson’s comments, saying councils such as the Pyrenees Shire council had already taken steps to reduce rate growth while still maintaining services for the shire.
“When I became a councillor eight years ago we were looking at eight and nine percent rate growth for the shire,” Cr O’Connor said. “(Until the rate capping announcement) The Pyrenees Shire was working 4 per cent rate increase.”
Councils wishing to apply will need to lodge a formal application with the Essential Services Commission by the end of March, with decisions to be made before July 1.
Minister for Local Government Natalie Hutchins said just because a shire applies for an exemption does not mean they will receive one.
“Councils will need to justify a higher cap to the independent umpire and to their ratepayers each and every year,” Ms Hutchins said.
"Three out of four councils have already said they'll be sticking to the cap which is a win for ratepayers.”
