Rate cap­ping only scores quick and easy points

Southern Gazette (South Perth) - - News -

RATE cap­ping has been placed on the agenda by the State Gov­ern­ment in the past month in re­ac­tion to per­ceived ex­ces­sive rate rises from some Perth metropoli­tan lo­cal gov­ern­ments.

It has been floated in the past as an idea to place down­ward pres­sure on rates. But the present cap in place in NSW has ad­versely im­pacted the stan­dard of com­mu­nity in­fra­struc­ture.

Man­age­ment and main­te­nance of as­sets is greatly af­fected, roads and com­mu­nity fa­cil­i­ties suf­fer, and a de­lay on their up­keep re­sults in more costly re­place­ment later.

Cap­ping rates is a quick and easy way to score po­lit­i­cal points with the wider com­mu­nity.

But it does not rep­re­sent sound fi­nan­cial man­age­ment, plac­ing mas­sive de­mands on lo­cal gov­ern­ment to de­liver the many ser­vices, fa­cil­i­ties, works and projects the com­mu­nity ex­pects and needs but with less money in a tight­en­ing fis­cal en­vi­ron­ment.

Lo­cal gov­ern­ments are highly re­spon­sive to their com­mu­nity needs and the days of the sec­tor be­ing all about just rates and rub­bish are long gone.

Man­ag­ing the long-term fi­nan­cial sus­tain­abil­ity of lo­cal gov­ern­ments con­tin­ues to be a chal­lenge amidst the re­duc­tion and freez­ing of Fed­eral grants, as well as in­creases to State charges such as the waste levy and street light­ing costs, which in turn is ab­sorbed by coun­cils.

It is true that some smaller lo­cal gov­ern­ments are fac­ing a bat­tle to re­main fi­nan­cially sus­tain­able and this has led to higher rate rises, but pol­icy levers such as rate cap­ping also af­fect the big­ger, vi­able lo­cal gov­ern­ments who have ef­fec­tively man­aged and main­tained in­fra­struc­ture, ser­vices and pro­grams while en­sur­ing rate in­creases are min­imised.

I firmly be­lieve that lo­cal gov­ern­ment bud­get­ing and rat­ing is a rig­or­ous process that would hold up to any third-party scru­tiny, but rather than im­pos­ing rate caps, the State Gov­ern­ment should work to­gether with our sec­tor to achieve pos­i­tive out­comes for our joint con­stituents, lo­cal ratepay­ers and res­i­dents.

Ul­ti­mately, lo­cal gov­ern­ment scru­tiny oc­curs ev­ery two years at the bal­lot box where elec­tors ex­er­cise their right and judge the per­for­mance of their coun­cil – this is called democ­racy, not rate cap­ping.

Troy Pickard, Aus­tralian Lo­cal Gov­ern­ment

As­so­ci­a­tion pres­i­dent

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