The Municipal Association of Victoria (MAV) has announced council rates will rise an average $75, or five per cent, this coming financial year to help cover the growing costs of community service demands, hikes in Government levies and the impact of the Federal Government’s carbon pricing scheme.

 

President of the MAV, Cr Bill McArthur, said that as the economy slows, councils are increasingly under strain to increase community services to meet local needs.

 

“The Local Government Cost Index has forecast it will cost an average 3.9 per cent more this year to provide the same level and mix of services as last year. That’s around $58 per ratepayer to maintain the status quo,” Cr McArthur said.

 

“Local government’s contribution to vital community program such as aged care, youth and family services continues to grow as funding from other levels of government fails to keep pace with service delivery costs.”

 

A recent analysis conducted by the MAV shows that the carbon tax will see council costs increase by 0.8 per cent. Excluding any mitigation programs to reduce council emissions, if carbon price cost increases are collected through rates it would equal a median rate rise of 1.5 per cent – around $22 per ratepayer.

 

Cr McArthur said a common misconception was that rates should rise in line with CPI, which measures a common basket of household goods and services not construction, material and wage costs facing councils.

 

“Councils need staff to deliver over 100 community services and maintain $60 billion in local assets.

 

“It’s never easy striking a balance between keeping rates affordable and delivering everything that communities have come to expect. When councils ask what services they could reduce, communities generally want all the same services but at a lower cost.