THE CITY of Ballarat says the state Labor Opposition’s plan to cap rate increases at the national inflation rate would be detrimental to its budget.
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A report by council officers found the change would knock almost $2 million off the budget in the first year, and then more than $4 million in the second year.
Councillor Vicki Coltman requested the report, and said it was important the community understood the real cost of cheaper rates.
“(The cap) would have drastic implications to the services we provide,” she said.
“If we went to a rate-capping system, council would provide roads and rubbish, that’s it.
The library, meals on wheels, all that would have to be looked at.”
The previous Ballarat City Council capped rates at four per cent with limited impact on basic services.
A recent survey of 600 residents found almost half would support lower rates and less services.
Cr Coltman said it was understandable people supported lower rates, but a drop in services would also be unpopular.
“People say (they want lower rates) until you say you are going to cut their services,” she said.
The report said people hardest hit would be those who depended on services only the council could provide at a low cost, such as aged care and maternal and infant support programs.
The Labor Party announced its plan to cap rates in May, and since then both council peak bodies have come out in opposition to the plan.
It would allow councils to appeal to the Essential Services Commission to justify any rate increases beyond inflation to avoid “unsubstantiated or excessive” rates hikes, as outlined in the policy proposal.
Rates in Ballarat increased 7.5 per cent in the last financial year and will go up 6.5 per cent again in the next year.
Cr Coltman said the council was already working hard to drop costs.
“Council is pushing efficiencies all the time,” she said.
“We ask two questions (about services); is this a core business for the council, and is there a private operator who could do it?”
Councillors will debate the report at Wednesday’s meeting.