Union critical of council rate caps

Perennial debate over municipal rates has resurfaced in the Wimmera, this time from a union that believes the system is costing jobs across the state.

Australian Service Union believes the State Government’s municipal rate-capping policy is costing Wimmera councils up to 52 jobs.

The union has used data from an Australia Institute Centre for Future Work report it commissioned to back its claim.

In the process it has listed the number of jobs it believes the rate cap has cost specific councils.

It claims the cap damages ‘local’ workforces and has detrimental effects on essential community services.

Based on localised data from the report the union lists the rate cap costing 22 jobs in the Horsham municipality.

It also lists up to 13 jobs in Northern Grampians Shire, 13 in Ararat, seven in Yarriambiack Shire, six in Hindmarsh Shire and four in West Wimmera Shire.

The report also determined that despite Victoria recording population growth of more than 20 percent in the past decade, there were about 3000 fewer local government workers in 2019-20 than eight years prior.

The assessment was that rate capping had cost up to 7425 jobs in public and private sectors and reduced gross domestic product by up to $890-million in 2021-22.

The union believes local government revenue from other sources, including user fees and fines, were now growing at more than twice as fast as before the cap was introduced.

Union secretary Lisa Darmanin said Victorians were seeing fewer local government services, more ‘user pays’ programs to cover funding shortfalls and a casualisation of council workforces that created employment insecurity.

“Local government is an important and outsized employer of choice in regional Victoria that could be providing even more high-quality middle-income jobs in regional Victoria,” she said.

“Local communities know what they need – they don’t need interference from the State Government in Melbourne.

“Rate capping imposes a top-down, one-sizefits-all approach at the expense of democratic decision-making and local jobs and services.”

Report author and economist Dan Nahum said there was no evidence rate caps made local councils ‘more efficient’. Instead, they took money out of council services and ‘robbed’ communities of employment opportunities.

“Far from protecting ratepayers and residents, rate caps hurt them,” Mr Nahum said.

“Rate caps compromise service delivery, negatively impact employment and wages among residents employed in the local government sector, result in higher fees collected through other revenue tools and reduce local government expenditures flowing back into the private sector.”