Every two years, we are required to report on the outcomes of rate capping in Victoria. We identify any impacts or trends that might be emerging across the local government sector.

You can use this page to download information related to your council and view our over-arching report. 

This is our first outcomes report

We have completed the first of these reports since the introduction of rate capping in the 2016-17 financial year.

The outcomes report aims to provide information about councils’ service, infrastructure and financial outcomes following the introduction of rate capping. This first report looks at the outcomes in these areas in the years 2016–17 and 2017–18.

The report includes an overview paper accompanied by fact sheets on the impact of rate capping for each of the five council groups and for each local government area.

View your local council's fact sheet

Find information about your local council's revenue, expenditure and finances before and after the introduction of rate capping: 

1. Use the tabs at the top of this page to find your local council.
2. Download your council's fact sheet and the related council group fact sheet. You can use the group fact sheet to compare your council to a group of similar councils. 
3. View our reader's guide to council fact sheets, which aims to help you understand how we've presented data in our local council and council group fact sheets.

What happens next

We will continue to monitor the outcomes of rate capping and expect to release our second report in 2021, which will include results from 2018–19 and 2019–20. This will enable you to start to see your local council's trends over time in key outcome areas.

We're also going to work with all Victorian local councils in preparation for the next outcomes report in 2020-21. We will be reviewing our processes and the measures included in the report to see how we may improve our second report in two years’ time. This will include seeking feedback from councils and ratepayers as part of our ongoing engagement with the sector.

Other useful resources

If you'd like more information on rates, you can view:

• your council’s annual report, budget and website
• the Local Government Victoria's website 
• the Victorian Auditor-General’s Office's interactive dashboard of council financial results
• the Victorian Government’s Know Your Council website, which gives you consistent information about the performance of local councils across Victoria.

Got a question?

Contact us for more information.

We have received and assessed one application for a higher cap for 2018-19. Monash City Council applied for a one year higher cap of 3.53 per cent.

We have approved an alternative higher cap of 2.57 per cent, which is 0.32 per cent above the minister’s cap. 

Our Monash City Council Decision on Application for a Higher Cap 2018-19 paper outlines our assessment approach and explains how we reached our decision.

We have also published the Monash City Council higher cap application for 2018-19, and other resources. 

In January 2015, the Minister for Finance asked us to conduct a review and report on a local government rates capping and variation framework for implementation from the 2016-17 financial year. Our final report outlines a rate capping and variation framework.

The government released a response to our report.

Each year, the Minister for Local Government sets the rate cap that specifies the maximum councils’ can increase rates for the forthcoming financial year. The minister can set a cap that applies to all councils, a group of councils or a single council.

Our advice to the minister includes:

• a recommendation for any adjustments to be applied to consumer price index in setting the cap for all councils, a grouping of councils or any individual council
• the rationale for any adjustment
• a preferred option if we recommend more than one option.

Councils can choose to submit a higher cap application to us if the rate cap does not meet their needs. 

We released decisions on higher cap applications for the 2016-17 financial year.

We asked Mr Peter Brown (former CEO of Moreland City Council) to undertake an independent review of our process and approach for assessing higher cap applications for 2016-17 year (as outlined in the review's terms of reference).

The findings from the review embody the independent judgements of its author and will help us plan and prepare for future higher cap applications from councils. Mr Brown completed his review and submitted the independent report on higher cap applications on 28 September 2016.

We released a response to the independent report. 

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.

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.

To identify the best way to set an efficiency factor, we undertook a productivity study. The study looks at productivity trends in the sector and identified options to estimate an efficiency factor.

We used feedback on the productivity study to help inform our draft proposal on setting a local government efficiency factor. In turn, feedback on our draft proposal has helped inform our final paper on advising a local government efficiency factor.

Why set an efficiency factor?

In September 2015, we issued our final report summary on the local government rate capping and variation framework. We advised the minister that the annual rate cap should take into account changes in the Consumer Prices Index (CPI) and the Wages Prices Index (WPI), and include an efficiency factor.

The purpose of this paper is to outline our final proposal for advising the minister on the required efficiency adjustment in the rate cap formula.

Project timeline

• Productivity study released and open for consultation – Wednesday 13 September 2017
• Submissions on consultation paper closed – Friday 13 October 2017
• Release paper on our draft proposal to set an efficiency factor – 15 December 2017
• Submissions on draft position paper close – 14 February 2018
• Final paper advising on a local government efficiency factor – March 2018

Our findings will help us understand and assess higher cap applications that cite growth as a key reason for needing additional revenue above the minister’s cap.

We conducted this review in response to an independent review of our first year implementation of the Fair Go Rates system in 2016, which recommended a review into any special financial issues associated with growth area councils.

Feedback on the study

To view submissions, visit Arup’s Growth Study Report.

Got questions?

Contact us if you have queries.