Ballarat ratepayers could still see a big jump in their rates bill after the city council’s application to raise rates by more than 2.5 per cent was denied.
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This is because the policy has arrived in a year when councils revalue houses.
On Tuesday the Essential Services Commission announced its rejection of council’s application to raise rates by an average of 3.7 per cent.
Deputy Mayor Belinda Coates said the cap would not stop a jump in rates beyond 2.5 per cent for everyone.
“(The cap) will likely have a very minimal impact on most people who are ratepayers, especially in a revaluation year when some people’s rate notices will go up, some might go down a bit, and some will sort of remain the same,” she said.
“In effect, overall, if you average it out it won’t make a big difference to most people.”
“The only thing it will make a big difference to in the long term will be council’s ability to plan for infrastructure and services and growth.”
While the City of Ballarat overall has seen a median house price increase of 3.2 per cent in the last year growth varies between suburbs.
The median house price for Brown Hill, for example, has gone down from $290,000 to $273,000 in the year to March 2016 according to CoreLogic data.
A property’s land and building value (known as the capital improved value) is multiplied by 0.4350 before other charges, like the state government’s Fire Services Levy and the green waste trial charge, are added on.
Both Cr Coates and City of Ballarat Justine Linley said the cap showed the limitations of the current funding system for local government.
“We do need recognition of local government as a legitimate tier (of government),” said Ms Linley.
“Councils are responsible for a third of all infrastructure and yet we’ve only three per cent (of taxation) to cover 34 per cent of the infrastructure needs,” said Ms Linley.
“To take a million dollars out of our ability to look after broader public infrastructure, it’s not just being used by the people of the City of Ballarat but the broader region, so it will have an impact.”
“You can understand that people have difficulty accepting the idea of rates going up, but because it’s a wealth-based tax it doesn’t have the flexibility to take into account the individual’s circumstances,” said Cr Coates.
The City of Ballarat was one of 10 councils to apply for a rate cap exemption and one of four to be denied a rate increase of more than 2.5 per cent, with the ESC saying they only had short-term finances in mind.
