FRANKSTON mayor Nathan Conroy says increased interest rates and material costs justify his call for a review of the state government rate cap.
Conroy authored a submission to a state government inquiry late last month calling for a review of the state government’s rate cap. The rate cap limits how much Victorian councils can raise rates and charges on average each year – for the 2024/2025 financial year it is set at 2.75 per cent. Conroy’s submission was made just days after he publicly called for council officers to investigate a rate freeze as a potential cost-of-living relief measure (“Mayor calls for rate cap review”, The Times, 22/7/24).
The mayor has defended his submission to the inquiry, saying that council is struggling to pay for its current services. “Frankston City Council delivers nearly 100 services to almost 150,000 residents in our municipality, from waste collection, roads and open space management, to libraries, kindergartens and in-home aged care. Like other councils, we’re facing a range of increasing financial pressures which are making it difficult to maintain delivery of these services under the existing revenue and funding framework,” he said.
“Some of the challenges include the increased cost of borrowing, with 13 interest rates increased in the past two years, rising cost of materials particularly in the construction space, and significant increases in insurance, utilities and other services. We’ve also seen a reduction in the availability of Victorian Government grant programs. On top of this, councils are also bearing the impact of services and infrastructure delivery shifting from the Victorian Government to local government.
“Our submission to the local government enquiry, like those of other councils, highlights the impact of these pressures on the long-term provision of services and infrastructure at current levels, and calls for a range of actions to help support the long-term financial sustainability of local government. A review of the local government revenue raising framework is just one of those actions.”
Conroy said that the 24 June council decision to investigate a rate freeze is “separate to our advocacy to the Victorian Government”. He said the final report will “explore a range of options to support the community in managing the immediate impact of the rising cost of living. This included a range of potential measures, from a review of our financial hardship policy, to temporary freeze in rates and the suspension of interest on outstanding accounts.”
Mayor defends rate review submission
