RATE payers can expect only minor rate increases in the 2020-21 financial year after Local Government Minister Adem Somyurek announced on Friday rates increases would be capped at two per cent for 2020-21.
This is a drop from the 2.5 per cent rate cap for the 2019-20 financial year.
Northern Grampians Shire mayor Councillor Murray Emerson said the cap would pose some difficulties for the council.
"During our budget process we look at the services and cost of those services against the rate increase to see which ones we should look at or might not be able to do anymore, but of course that's gauged on what the community wants, not what we want," he said.
Read more: Victorian council rate cap set for 2020-21
"The new rate cap suggestion of a two per cent increase for the next financial year will certainly make it a bit more difficult for small rural shires. But of course our services are regulated by the state and federal government and they're not the sort of thing we can get away from.
"We might want to get rid of a service but the community yells out and says no, we want that service to remain. So that's the predicament we're in all the time - we've got to balance up the rates against the services we can provide for that amount of money."
Rates revenue in the 2018-19 year for Northern Grampians was $17.4 million, and rates revenue for Ararat was also $17.4 million.
Both Cr Emerson and Ararat Rural City Council mayor Cr Jo Armstrong said the rate cap system exacerbated inequity between rural councils and metropolitan or regional councils.
"The bigger issue for us (Ararat) as a small shire is the inequity of the whole rating system," Cr Armstrong said.
"Our options to expand the number of rateable properties that are increasing in value is no where near the options that metropolitan or interface councils have, and we haven't even talked about parking revenue that city councils receive.
"So they've got all these other revenue streams that are significant and we're so reliant on state and government grants to be able to function, and that's where the inequity lies."
Cr Emerson said the council hasn't made an application for exemption to the cap "but I daresay we'll have to look at it if the two per cent comes in."
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