We released decisions on higher cap applications for the 2017-18 financial year.
Higher cap applications 2017
We received and assessed five applications for higher caps. We received applications ranging from one to four years.
From 2017, councils can apply for up to four years of higher caps.
|Council||Higher cap being sought (including minister's rate cap)|
|Pyrenees Shire Council||3.5%||3.5%||na||na||Approved|
|Hindmarsh Shire Council||4%||na||na||na||Approved|
|Borough of Queenscliffe||4.5%||na||na||na||Not Approved|
|Towong Shire Council||5.55%||5.55%||5.55%||5.55%||Approved|
|West Wimmera Shire Council||3.5%||3.5%||3.5%||3.5%||Approved|
The overview paper summarises the five applications we received and the decisions made. It also outlines our approach to assessing applications and observations from the first two years of higher cap applications.
The five decision papers detail each council's application and how we reached our decision.
We also publish each council's applications, any additional information provided by councils on request, and expert advice which informed our decisions.
What this means for councils
Councils must limit their average rate increase for 2017-18 to the rate cap set by the Minister for Local Government, or a higher cap approved by us. The minister set a 2 per cent rate cap for 2017-18.
Where we have approved a higher cap for 2018-19 or beyond, the council must limit its average rate increase in that year to the approved higher cap. Other councils will need to comply with future rate caps set by the minister, or successfully apply for a higher cap.
More information on compliance is available in our guidance resources.
What this means for ratepayers
In 2017-18, your rates may increase by more or less than the rate cap set by the Minister or a higher cap approved by us. This is because the caps apply to the average rate in a municipality. The rate increase of individual properties may be different because:
- the value of your property may increase or decrease relative to other properties in your municipality
- changes in municipal charges and differential rates may affect some ratepayers and not others
- special rates and charges, waste collection charges and the fire services levy are not subject to the rate cap.
More information on the impact on rates notices is available in the overview paper.
How we make our decisions
We consider whether a council has demonstrated a long term financial need that should be funded through a higher cap. We also consider a council’s compliance with previous years’ caps (either rate caps set by the Minister or higher caps approved by us).
The legislative matters are:
- the proposed higher cap for each specified financial year
- 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 those options are not 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 statutory objectives are:
- to promote the long term interests of ratepayers and the community in relation to sustainable outcomes in the delivery of services and critical infrastructure
- to ensure that a council has the financial capacity to perform its duties and functions and exercise its powers.
More information on how we make our decisions can be found in the overview paper.