City of Ballarat councillors have voiced concern over the huge rate rise flagged for residential properties, leaving open the possibility of hardship relief for struggling households as the cost-of-living crisis deepens.
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The draft City of Ballarat 2022-23 budget, released for public consultation this week, includes a rate rise of 1.75 per cent - the maximum permitted under a state government-imposed cap.
But the average residential rate payable is set to increase by 6.4 per cent, notwithstanding the cap, due in large part to the differential distribution of rates applied by council between residential, commercial and industrial properties.
"When people see rates going up by 1.75 per cent, that is [council's] income [from rates] going up by 1.75 per cent; it doesn't mean people's rates will go up by [only] 1.75 per cent," said City of Ballarat chief executive Evan King.
In the draft budget, the average residential rate increases to $1588, nearly $100 more than last year. By contrast, the average rate payable by commercial and industrial properties falls by between 10 and 13 per cent in line with council's four-year strategy to ease the burden of rates shouldered by business.
Mr King said the council-imposed changes to the differential distribution of rates constituted only one of two reasons residents would contribute a bigger slice to rates revenue this year.
The other reason, he said, owed to soaring residential property values, which have wholly outpaced the modest rise seen in commercial and industrial properties across Ballarat.
Higher residential property valuations, Mr King added, had no bearing on council's bottom-line; they merely shifted some of the burden of rates from commercial and industrial ratepayers to residential ratepayers.
"With property valuations, all it does is determine who pays what percentage of that [rates] pie that's collected - we don't actually generate any additional revenue from it," he said.
Nevertheless, the prospect of a 6.4 per cent residential rate rise has councillors concerned, with annual inflation surging to 5.1 per cent - its highest in over two decades - and anaemic wage growth combining to give many residents a $2000 paycut in real terms by the end of June.
Cr Mark Harris pointed out the circumstances, taken together, put council in an invidious position, given council's budget was neither immune from the impact of inflationary pain, nor the implications of the looming interest rate hike foreshadowed by the Reserve Bank of Australia.
"Rates are inequitable - but we also know that inflation is going to challenge our budgetary position a lot because of just the way we do business [and] providing services will be very, very challenging," he said.
"We've got to make sure our budget is robust enough to cope with that. It's time to get our community involved in the considerations."
Echoing Cr Harris, Cr Des Hudson said council must consider measures which would relieve the increased financial pressure brought about by the rate rise on various households, including pensioners.
"We are going to have to look at every situation so that we don't leave those who find themselves in financial crisis behind," Cr Hudson said.
"There are some opportunities to alleviate some of the pressures [on households]."
Both Cr Ben Taylor and Cr Amy Johnson aired similar concerns.
In response, Mr King indicated council would have a briefing session to consider all available options to ease the added financial strain occasioned by the rate rise.
"[The 6.4 per cent rate rise] does have the challenge that it will put additional [financial] burden on those on fixed incomes or those on low incomes to pay a greater portion of the rate," he said.
"It would certainly be worth us taking that to a briefing to have a conversation around what might be some options to try and (sic) take some of the pressure off, particularly our pensioners."
City of Ballarat will host two community consultation sessions on the budget next week. The first is on Monday 2 May 1-2pm and the second on Thursday 5 May 5-6pm at Town Hall.
Residents can also provide feedback by post or online via a survey or email until 22 May 2022. Click here for details.
Council will formally adopt the budget in June.
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