The Western Australian Local Government Association (WALGA) has come out swinging at a proposed rate cap by WA Labor, saying it would see the loss of key local services and facilities.

WALGA President, Mayor Troy Pickard, said the plan ‘had a number of critical flaws’ and ‘lacked appropriate economic fundamentals’.

"There is so much wrong about this idea. It sounds reasonable in isolation but quickly unravels when you start to work through the implementation and the reality of local community financing," Mayor Pickard said.

"Let's start with what it really means for households to reduce Council rates in terms of their total tax burden. With 83 per cent of tax raised by the Federal Government, 14 per cent by the State and just three per cent by Local Government, the saving is not going to be much. 

"On to the principle that the CPI could underpin Council rates. Again this sounds logical but the variables - the basket of consumer goods - that make up the CPI are not what inflates the costs of Council operations. These costs in the main are labour costs and infrastructure costs."

Mayor Pickard said for the past four years WALGA has set a Local Government Cost Index which it recommends be applied to Council rates as a more appropriate measure of the inflation effects on Council costs.

“Certainly if a community is asked to pay rate increases in excess of the Local Government Cost Index then we would expect the relevant Council can provide an adequate explanation, such as funding a one-off major project; under rating in previous years; or to meet an extra ordinary loss of revenue or increased costs as a consequence of decisions by other spheres of Government such as cutting grants or shifting service responsibility,” he said.

"But rest assured there is no interest or attraction to any Local Government Elected Member to unduly increase rates and have to answer to an aggrieved community.