Council rate increases to be capped in Victoria
The state government is looking to reduce pressures on household budgets over the coming two years.
Council rate increases have been confirmed as being capped at the forecast Consumer Price Index (CPI) for next financial year, according to a statement from the Premier of Victoria, the honourable Jacinta Allan MP.
Victoria’s Minister for Local Government, Melissa Horne, has announced the rate cap will sit at 2.75 per cent, under the “Fair Go Rates system” – a recommendation from the Essential Services Commission.
The 2.75 per cent cap is equal to the forecast CPI for the 2024–25 financial year, with the rate cap set to limit the amount all Victorian Councils can increase their total revenue from general rates and municipal charges.
It should be noted that service rates and charges used to fund waste collection and management will not be subject to the rate cap.
The guidelines also reveal that services providing “a general benefit to the whole municipality” cannot be funded by service rates or charges to individual ratepayers – these include things like tree planting, graffiti removal and street cleaning.
Despite the cap, the government did note that local councils are able to apply for a higher rate cap “if they can demonstrate community support and a critical need for spending on services or projects that require a rate rise above the capped amount”.
It was noted that this financial year, there were no applications for an exemption, when the cap was set at 3.5 per cent.
Just last year, the Victorian government undertook a parliamentary inquiry into the state’s rental and affordability crisis, acknowledging the challenges facing residents across the state.
In that inquiry, it was found there was no silver bullet for housing, with a coordinated national response required.