Rate Capping update

Established following the 2014 Federal Budget cuts to core financial assistance grants and Labor’s proposed rate capping policy, the Taskforce is guiding the MAV’s strategy and response on these two critical issues.

Late last year the Taskforce endorsed us to commission work by a top tier consultancy to construct an independent local government cost index that reinforces CPI has no bearing on changes to councils’ cost movements. This work will be important in advancing our ongoing discussions with the Victorian Government towards development of a sustainable model for rate capping to be introduced in 2016/17.

In its formal response to our Call to Parties, the ALP made some important pre-election commitments in relation to the introduction of its rate capping policy. These included:

• Working with councils, the MAV, other peak bodies, relevant unions and the Essential Services Commission to “…get this right”
• Factors the Essential Services Commission will take into account when deciding rates rises above CPI: Federal Budget cuts to core local government grants; cost shifting by other governments, such as the imposition of additional taxes or levies or increased statutory responsibilities; extraordinary circumstances such as natural disasters; other sources of income available to a council and their overall financial position; and the need to maintain essential community services and infrastructure.

Our focus is now on influencing how this core Labor election promise is actioned. We have a meeting with Minister Hutchins next week where this will be one of the issues discussed.

The February MAV Board meeting next Friday will consider inclusion of additional members ahead of the Finance and Rate Capping Taskforce’s meeting in early March. Please contact Owen Harvey-Beavis as soon as possible if your council is interested in joining our Taskforce.

Back to: Financial Assistance Grants and Rate Capping Taskforce.