FRANKSTON Council has warned rates capping will cause a $28 million budget black hole in its budget within four years.
Mayor Cr James Dooley says council had not joined 21 other Victorian councils in asking for an exemption from the 2.5 per cent rise limit, linked to the annual inflation rate, for 2016-17 but says Frankston residents will be asked in future about their willingness “to give up high quality services and infrastructure maintenance or back us up in advocating for an exemption through the Essential Services Commission”.
“Prior to last year’s announcement of a 2.5 per cent cap, Frankston City Council had already undergone a major restructure to reduce costs and reworked its long term financial plan,” Cr Dooley said.
“This has already seen council forced to make some tough decisions to weather the storm, such as ceasing our financial commitment to providing after-hours school care and reducing the discounted venue hire options we provide to schools and community groups.
“The numbers say it all – even more will have to give if this cap continues into the next few years, as our costs increase at a greater rate than the CPI.”
Council number crunchers estimate the Labor state government’s ‘Fair Go Rates Cap’ policy will create a $28 million budget shortfall by the year 2020.
Local Government Minister Natalie Hutchins has made it clear any rates increase above the rate of inflation must be justified.
“We want to see councils more accountable, more transparent and more responsible with how they spend ratepayer funds,” Ms Hutchins said last year shortly after Labor won government (‘Councils rates warning’, The Times 19/1/15).
Cr Dooley says the state government must increase its share of funding local services if the rate capping policy is not to lead to severe service cuts.
“Substantial cost shifting has taken place under successive state governments in areas like maternal and child health, libraries and school crossings, which have been covered by ratepayers,” he said.
“Victorian government funding originally covered an equitable share of the total cost in each of these areas, but has dropped their contribution to 34 per cent for maternal and child health, 21 per cent for school crossings and just 16 per cent for library operating costs.”
“Other areas that have been impacted by cost-shifting include kindergartens, animal management, beach cleaning, foreshore management, dredging, fire hydrants, statutory planning fees and the maintenance of roads managed by VicRoads.
“We look forward to the State Government restoring a more equal level of funding for these important areas for our community.”
- The 21 councils who have asked the ESC for an exemption to the rates cap for the next financial year are: Bass Coast Shire Council, Buloke Shire Council, City of Ballarat, City of Casey, City of Darebin, City of Greater Geelong, City of Melbourne, Glen Eira City Council, Hepburn Shire Council, Hindmarsh Shire Council, Horsham Rural City Council, Latrobe City Council, Maribyrnong City Council, Mitchell Shire Council, Moorabool Shire Council, Murrindindi Shire Council, Pyrenees Shire Council, Towong Shire Council, Yarra City Council, Yarriambiack Shire Council and Wyndham City Council.