The government has announced the rate hike limit after receiving advice from the Essential Services Commission and was the maximum amount a council could increase general rates and municipal charges by, although councils could apply for an exemption.
“The rate cap for the next financial year takes into account higher inflation and the need to protect Victorians from uncontrolled rate hikes, while ensuring councils can continue to deliver vital community services,” Victorian Local Government Minister Melissa Horne said.
“Each council is responsible for setting rates within the rate cap based on the needs of their community.”
It was revealed at Greater Shepparton City Council’s November meeting that its October budget was $18 million in the red due to the impacts of COVID-19, inflation and clean-up from floods in October.
Mayor Shane Sali told that meeting he believed rates would need to rise and he would likely support passing on the maximum rate increase, although he made those comments before the state government’s rate hike announcement on Wednesday, January 4.
“I can’t speak for all councils and predetermine an outcome, but I think it’ll be very hard for us to maintain another zero per cent rate increase just on the sheer increase of expenses,” Cr Sali told the November meeting.
“We’ve also got to be mindful that whatever we do has an impact on (the) community whether it’s positive or negative.”
Reacting to the government announcement that rates could increase by 3.5 per cent, Cr Sali said the matter would be considered this month.
“Councillors return to briefings later in January and this announcement will form part of our discussion on our upcoming 2023-24 budget,” he said.
“It will be a financial challenge to maintain a zero per cent rate increase for a third year in a row.
“Council is not immune to all increases that face everyone at the moment.
“Two years of the pandemic, the October floods and December storm event have had a major impact on our resources, especially financially.
“Councillors look forward to discussing how we can create a fair and responsible budget in light of these challenges.”
The government said the cap, which it referred to as Fair Go Rates system, protected Victorians from uncontrolled rate hikes while ensuring local governments remained financially sustainable.
