FRANKSTON mayor Nathan Conroy has written to the state government to criticise its cap on council rates just three days after publicly calling for council officers to investigate a rate freeze.
Frankston Council made a submission to the state government’s inquiry into local government funding and services on 27 June. The submission, signed by the mayor Nathan Conroy, read that the state government’s rate cap is restricting council’s ability to generate revenue.
“The current rate cap system is not providing sufficient rate revenue to match the actual increase in the cost base of existing services and infrastructure,” Conroy’s submission read. “A key long-term problem is that councils do not have adequate base-level funding.
“Rate capping has prevented councils from increasing rates beyond the cap set by the Victorian Government based closely on CPI. Council is of the view that there is a need to introduce a Local Government Cost Index for the setting of the Victorian rate cap, that reflects the costs factors of local government.”
The submission was sent just three days after Frankston councillors approved Conroy’s proposal to investigate a range of cost-of-living relief measures, including a rate freeze.
Before voting to direct council officers to produce a report on the financial impact of a rate freeze, Conroy said “we acknowledge that the current cost of living crisis is affecting people throughout our community, and this report sets the foundation for a new council to have information – the data, the social, economic, and political reasons why we should or shouldn’t change our long-term financial plan.” (“Rate freeze considered at council” The Times 1/7/24)
Conroy did not respond to questions from The Times by publication deadline.
The rate cap restricts how much councils can raise rates and charges on average each year. The state government set a rate cap of 2.75 percent for the 2024/2025 financial year.
Submissions to the inquiry from both Frankston Council and the Mornington Peninsula Shire read that “cost shifting” was putting council budgets under strain. The Shire’s submission read “due to cost shifting MPSC anticipates an expenditure of $38.1 million in operational costs for 2023/24, with projections reaching a staggering $234 million over the next five years.”
“The ongoing practice of cost shifting by the state and federal governments over the years has posed a significant financial challenge, jeopardizing both the provision of essential services and the financial sustainability of local government. Examples include the recent kindergarten reforms, the Recycling Victoria kerbside reform and the management of the expansive foreshore. However, these mandates often come without sufficient funding, considering the level of service expected,” the Shire’s submission read.
Frankston Council’s submission to the inquiry read that “the additional responsibilities falling on council are costing millions each year, with a strong need for more robust funding allocated by the state government.” It called on the state government to “undertake a detailed forensic financial analysis of service shifting to local government” and “allocate appropriate funding levels, with a minimum funding split of 50:50 if with one level of government, or a three-way split if with all three levels of government.”
Mayor calls for rate cap review
By BaysideNews