Each year the Minister for Local Government (the Minister) will set the rate cap that will specify the maximum increase in councils’ rates and charges for the forthcoming financial year. The Minister has the capacity to set a cap that applies to all councils, a group of councils or a single council. In circumstances where the rate cap is insufficient for a specific council’s needs, it can apply to the Essential Services Commission for a higher cap.
In considering whether to approve a higher cap, the Commission will have regard to:
- the proposed higher cap and the specified year(s) that it will apply
- the reasons for which the council seeks the higher cap
- how the views of ratepayers and the community have been taken into account in proposing the higher cap
- how the higher cap is an efficient use of council resources and represents value for money
- whether consideration has been given to reprioritising proposed expenditures and alternative funding options and why the council does not consider those options to be adequate
- that the assumptions and proposals in the application are consistent with the council’s long term strategy and financial management policies set out in the council’s planning documents and annual budget.
The Commission has released its decisions on the 2016-17 higher cap applications.
We asked Mr Peter Brown (former CEO of Moreland City Council) to undertake a fully independent review of the Commission’s process and approach for assessing higher cap applications for 2016-17 year (Terms of Reference). The findings from the review embody the independent judgements of its author and will assist the Commission in planning and preparing for future higher cap applications from councils. Mr Brown completed his review and submitted his report on 28 September 2016.
The Commission will now carefully study its findings and recommendations with the view to refine our process and approach for future higher cap applications from councils. We have now released our response to the report.
- Overview and Questions & Answers (3)
31 May 2016 Overview of Local Government higher cap decisions 2016-17
- City of Ballarat – Application for higher rate cap (9)
- Horsham Rural City Council – Application for higher rate cap (10)
- Murrindindi Shire Council – Application for higher rate cap (7)
- Moorabool Shire Council – Application for higher rate cap (11)
- Wyndham City Council – Application for higher rate cap (6)
- Buloke Shire Council – Application for higher rate cap (7)
- Pyrenees Shire Council – Application for higher rate cap (8)
- Towong Shire Council – Application for higher rate cap (10)
- City of Casey – Application for higher rate cap (9)