THE Federal Government needs to increase funding to ease the pressure on councils to lift rates, says Mildura MP Jade Benham.
Ms Benham said the Victorian Government’s decision to double the council rate cap did not make councils more sustainable and fell short of countering current inflationary pressure.
She said she would continue to address the issue with her federal counterpart, Anne Webster, and the Victorian Nationals leadership.
The council rate cap (1.75 per cent), which limits the amount by which council can increase its total revenue from general rates and municipal charges, has been lifted to 3.5 per cent for the 2023-24 financial year.
The State Government said the new rate would protect Victorians while considering the cost pressures felt by councils.
The Reserve Bank of Australia has noted that the consumer price index inflation rate peaked at about 8 per cent at the end of 2022 and says expects it to sit at 6.25 per cent in June 2023, before falling to 4.25 per cent in June 2024.
Ms Benham said the plight of rural city councils was the “biggest concern” given the current economic environment.
“We’re not going to get that just by going, ‘Oh, well, you can put the rate cap up double what it was last year’,” Ms Benham said.
“Meanwhile, inflation has gone up double that again.
“The feds need to do a fair bit of heavy lifting here and put some of that GST money back into the financial assistance grants.”
Former Mildura MP Ali Cupper campaigned for the Federal Government to increase funding from Commonwealth tax revenue from 0.55 per cent to 1 per cent.
Ms Benham said the Nationals’ policy at the election was to hold an independent inquiry into the funding of local government and the distribution of federal and state tax to cover services, including rates.
She said although the Nationals were in opposition, the party had a “stronger voice” at a state level and she would “continue the conversation” about Commonwealth funding.
The report, which was tabled in state parliament last December, noted that the caps shifted local government revenue-raising to “less progress and socially equitable” means such as fees and fines.
Ms Benham said she was “not a fan” of rate capping but it saved residents from steep rate hikes.
She said she was in favour of a state-wide rating system to set a dollar value rate.
In the decade before the system was introduced, council rates increased by an average of 6 per cent every year.
