News and resources

Councils work hard to keep rates low

Publish date:

Victorian councils have worked hard this year to keep the average rate increase to a 10-year low of 3.8 per cent, or $67, while still providing more than 100 vital community services and maintaining $73 billion of infrastructure and assets.

Municipal Association of Victoria (MAV) President, Cr Bill McArthur said councils were once again having tough conversations in order to tighten their budgets, and the annual MAV rates data demonstrated this achievement.

“Councils across the state have faced external funding challenges including the $139 million freeze on indexation to the Federal Financial Assistance Grants, the scrapped $160 million State Government Country Roads and Bridges program, and ongoing financial pressures from other levels of government,” he said.

“Despite these hardships, councils have been able to keep the average rate increase low, while still delivering services including kindergartens, public libraries, maternal and child health, home and community care, street lighting, waste services, and maintaining 85 per cent of the state’s road network.

“Many councils are implementing cost-saving measures by adopting online, collaborative methods of operation, with other levels of government and organisations to achieve savings.

"Councils are often unfairly criticised when they increase rates above CPI, but CPI does not reflect council costs. While CPI measures the cost of common household goods including bread, milk, and electricity, a council’s basket of goods includes more expensive items like construction, material and wage costs.

“Our survey shows that the average increase of 3.8 per cent is in line with the Local Government Cost Index of around 3-4 per cent, which tracks councils’ cost movements, but does not include extra funding needed to maintain ageing assets. The recently announced $1.1 billion national increase to Roads to Recovery funding will assist in relieving long-term pressure placed on councils.

“The Financial Assistance Grants freeze has led many councils, especially in rural areas, to make tough decisions in order to strike the right balance between the level of services provided to the community, while trying to keep rate increases low. The Country Roads and Bridges program was another funding stream relied on by 40 rural councils that is yet to be replaced by the State Government.

“These sorts of cuts put councils between a rock and a hard place. Rate rises cause community anxiety but service cuts cause community outrage.

“Councils have worked tirelessly this year to better understand what the community wants by holding public meetings, listening posts, participatory budgeting, and surveying residents.

“The MAV is aware that in the current economic climate, many homeowners face financial challenges, and we would urge residents under genuine financial stress to speak with their council to find a way forward.”

– Ends –

For further information contact MAV President Cr Bill McArthur on 0437 984 793 or the MAV Communications Unit on (03) 9667 5521 or 9667 5547.