Victorian local government has unanimously opposed Victorian Labor’s rate capping policy, which proposes councils should apply to the Essential Services Commission if they want to raise rates above CPI.
Councils are a distinct tier of government with democratically elected councillors to make decisions on behalf of the community. The autonomy of councils must be respected and councils must retain the flexibility to set appropriate budgets that meet local community priorities and needs. A legislated process already provides that councils make budget decisions in an open, transparent and accountable way that involves community input.
Rate capping in Victoria the 1990s resulted in councils deferring spending on capital programs such as roads maintenance and renewal. This led to faster deterioration of roads and other assets, and has consequently imposed higher costs on future generations of ratepayers to renew and upgrade under-maintained community infrastructure.
The $225 million asset renewal gap identified by the Auditor General is due to council-owned assets deteriorating faster than councils can fund their maintenance, renewal and replacement. This is projected to grow to $2.6 billion by 2026. If rate capping is introduced, it will result in a long-term devastating impact on the quality and availability of local roads and community facilities across Victoria.
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