Rate cap hurts shires

The Tatura Guardian - - News - By Thomas Moir

City of Greater Shepparton chief ex­ec­u­tive Peter Har­riott hopes coun­cil can work within the stateim­posed rate cap for an­other year.

Vic­to­ria’s peak body for lo­cal gov­ern­ment re­cently ar­gued rate cap­ping and cost shift­ing mea­sures were se­verely im­pact­ing the abil­ity of re­gional and rural coun­cils to de­liver ba­sic ser­vices.

The Mu­nic­i­pal As­so­ci­a­tion of Vic­to­ria last month told a Par­lia­men­tary in­quiry into rate cap­ping that a re­duc­tion in state and fed­eral gov­ern­ment fund­ing and the stateim­posed two per cent rate cap, ‘‘has left small rural coun­cils strug­gling to main­tain lo­cal ser­vices and as­sets’’.

MAV pres­i­dent Mary Lalios said fi­nan­cial pro­jec­tions in­di­cated cap­i­tal spend­ing in small rural shires would de­cline by 30 per cent from 2016 to 2020.

‘‘In the next two or three years, we are go­ing to see se­ri­ous im­pacts on coun­cils’ abil­ity to meet their com­mu­nity ser­vice and as­set re­newal obli­ga­tions, par­tic­u­larly in smaller coun­cils,’’ Cr Lalios said.

She cited sig­nif­i­cant losses from the Fed­eral Gov­ern­ment’s three-year freeze of Fi­nan­cial As­sis­tance Grants in­dex­a­tion and when the state gov­ern­ment did not re­new a coun­try roads and bridges pro­gram.

‘‘Un­der the two per cent rate cap, we are start­ing to see small coun­cils re­ally strug­gling to de­liver ser­vices and cap­i­tal works pro­grams,’’ Cr Lalios said.

In ad­dress­ing the pres­i­dent’s com­ments, Mr Har­riott said Greater Shepparton had an ad­van­tage be­ing a larger re­gional coun­cil.

But he re­in­forced if in­come was held be­low ex­penses, the same im­pact would be in­curred on ser­vices, re­gard­less of a coun­cil’s size.

It would be then the qual­ity of ser­vice would be com­pro­mised, he said.

‘‘Our size pro­tects us a lit­tle bit.’’

‘‘We might have a small buf­fer, but ul­ti­mately we’ll have to deal with the same mat­ters.’’

Mr Har­riott would rec­om­mend coun­cil did not ap­ply for an ex­emp­tion to next year’s rate cap, at this stage, but said coun­cil would con­tinue to lobby to in­quiries un­der way.

‘‘We’ll con­tinue to work within the rate-cap­ping en­vi­ron­ment,’’ he said.

‘‘If we want to be sus­tain­able, we need an in­come stream that al­lows us to be sus­tain­able.’’

The coun­cil has in the past two years worked within the cap on rate in­creases en­forced un­der the state gov­ern­ment’s Fair Go rates pol­icy.

But coun­cil’s fi­nance de­part­ment said this year’s bud­get had been more chal­leng­ing within the pa­ram­e­ters.

Last year, Mr Har­riott said the 2016-17 2.5 per cent cap had a ‘‘sig­nif­i­cant’’ and cu­mu­la­tive im­pact on coun­cils and it was well be­low the 4.95 per cent in­crease pro­jected in the coun­cil’s longterm fi­nan­cial plan­ning.

At the time, he an­tic­i­pated it would leave the coun­cil $1 mil­lion worse off in the first year alone.

Go-ahead: Jill Hen­nessy (right) turns the first sod of the rede­vel­op­ment of the hospi­tal, set to be­gin be­fore the end of the month.

Pic­tures: Rhi­an­non Tuffield

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