Councils face a tough task
There is no question the intentions behind ratecapping measures are sound.
The idea being to make sure local councils cannot continue to raise rates year in year out, to suit their purposes.
And arguably it has locally been successful in making sure councils are kept accountable.
To make sure they are diligent in finding savings and not just passing additional costs down the line to city residents.
To ensure the operation being run with the city’s money is as lean and mean as possible.
The almost 5 per cent annual rate rises Greater Shepparton City Council had budgeted for before the State Government’s Fair Go ratecapping program coming into force now look excessive.
Broadly speaking, by sticking to key financial principles in crafting the city’s annual budget, the council appears to have over the past two years managed to ably weather this storm so far.
Its attitude to rate-capping appears to have improved. Where the council had initially been highly critical of the stricter measures and multi-million dollar holes which would appear in the budget across a number of years, the reality is the council is coping well.
But as recent discussions indicate, including last week’s Shepparton-hosted parliamentary inquiry into the sustainability of local councils, a look at the way Victoria’s councils are funded appears to be timely.
Rate-capping seems to be only one factor.
The panel of Victorian MPs visiting Shepparton last week heard about costshifting measures from state and federal governments pushing services firmly into the territory of local councils. In other cases it heard about progressive removal of funding from programs and not completely replaced.
It appears the smaller regional councils are the ones doing it toughest at the moment.
And from insights offered last week, some are trying to avoid cutting services at all costs.
But based on these insights, if cost shifting and rate-capping measures continue to intensify and there is no longer fat to cut, it appears this is where residents will start to see the cracks appear.
When asset renewals need to be further delayed, the works schedule pushed back and the viability of services compromised.
Hopefully this point does not arrive and hopefully measures can be put in place to shore up the capacity of small regional councils to continue to provide the essential services ratepayers have come to expect from their councils.
It is a delicate balancing act and there needs to be a level of give and take. For now, it is pleasing the conversation is under way.