WIMMERA councils are increasingly concerned about the effects of rate capping as the state government policy enters its second year.
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The government introduced the policy for the 2016-17 financial year, with a statewide rate cap rise of two per cent.
Last week, parliament released its fourth report as part of a rate capping inquiry, which identified areas where councils had started to face increased financial pressure under the policy.
These included road maintenance, home and community care programs, and maternal and child health programs.
Yarriambiack mayor Graeme Massey said he was confident council could work within rate capping confinements this year, but worried about the policy’s long-term viability.
“Services will be provided, but providing for infrastructure supply and maintenance will be difficult later on, particularly with roads,” he said.
“Our population is almost equivalent in kilometres to the amount of roads we look after.”
Cr Massey said small rural councils were treading water, hoping things would change.
“We are like the busker sitting in the street with our hat out, but sometimes no one is listening,” he said.
“If this continues for five, six or seven years we would have to cut back on services and maintenance.
“We need a better handout from federal government tax money, an increase in Roads to Recovery money and a more sympathetic approach from the state government.”
Cr Massey said small councils like Yarriambiack relied on rates and government grants.
“We have nine towns, and each has a hall, swimming pool, footy oval, and we have to look after them,” he said.
“City councils might have only a couple of those, and they have heaps of alternatives to raise revenue.”
West Wimmera mayor Bruce Meyer said council did not anticipate reduced services for 2017-18.
“However to maintain our service level will require a draw down on our cash reserves, and that is not sustainable,” he said.
“A real issue for councils like ours is the current government removed the Country Roads and Bridges Program and the Local Government Infrastructure Program, which took $1.5 million a year from our available money.
“On top of that, rates can only go up two per cent.
“If you look at it like that, it’s absolutely impossible to manage.”
Horsham mayor Pam Clarke said a more sustainable funding model was crucial.
“Costs are rising greater than CPI, and we don't know where it's going to end,” she said.
“There has to be another way.
“The big problem is the government is making blanket rules across Victoria with no understanding of the massive difference there is between city councils and regional and rural councils.
“They need to acknowledge that every time they make a decision in Melbourne, there's a consequence in small rural councils.”
Northern Grampians mayor Tony Driscoll said there was no doubt rate capping restricted councils’ ability to deliver all services communities expected.
“The underlying thing is not so much rate capping for small rural councils, but the need for better funding model overall,” he said.
The Municipal Association of Victoria’s submission to the inquiry noted the long-term consequences of the policy would mean reduced infrastructure quality, a narrowing of service responsibilities, and reduced innovation to fulfill community needs.