FRANKSTON Council is set on a collision course with the state government over Labor’s plan to cap council rates rises.
Local Government Minister Natalie Hutchins has written to Victorian councils, including Frankston, to warn against “jacking up” rates in 2014-15 before Labor legislates to limit rates rises at the consumer price index rate (‘Councils rates warning’, The Times 19/1/15).
Frankston Mayor, Cr Sandra Mayer, has hit out at the state government plans to “potentially penalise” any council that increases its rates over the next 12 months.
Cr Mayer said council was able to work “within financial constraints to provide essential services and infrastructure to the community” but its budget would be put under pressure by the rate capping policy.
Council analysis predicts the rate capping plan will blow a $22 million hole in its budget over four years.
“A big reason for that cost is state government cost-shifting, where council now bears around 80 per cent of the cost for programs like out local libraries and school crossings, after they started as 50-50 partnerships with the state,” Cr Mayer said.
The mayor said the minister is welcome to review Frankston Council’s budget.
“We invite Natalie Hutchins to pay us a visit to discuss how we manage our budget responsibly at Frankston, and see the extensive work we have undertaken in recent years to keep rate increases to a minimum.”
Frankston councillors are concerned council may be forced to cut community services if the state government’s rate capping plan proceeds.
A government spokesperson said the Andrews Labor government “is committed to a more transparent and responsible approach to rate increases”.
“Under these changes, councils will need to justify their spending to ratepayers,” the spokesperson said.
“The cap will come into effect in 2016-17, with appeals to be considered by the Essential Services Commission.
“Unnecessary rate rises before this time could affect councils’ eligibility for future rate cap exemptions.”
The Minister intends to meet with a number of councils in the coming months.
Funding Frankston infrastructure projects could also be a challenge if the state government presses ahead with its rates capping plan, according to Cr Mayer.
“There is constant pressure from sections of the community to make improvements to infrastructure,” she said.
“With the state government’s reduced funding commitments and pressure on us to cap rates, someone has to pay for them or they won’t happen.”
