By CAM LUCADOU-WELLS
GREATER Dandenong Council has ruled out significant rate rises in 2015-2016 ahead of next year’s rate cap.
Last week, the state government repeated its election pledge to cap rate rises to the consumer price index from mid-2016.
It has stated that councils must apply to the Essential Services Commission to raise rates higher than CPI.
Annual CPI rose 1.7 per cent up to the December 2014 quarter, well below Greater Dandenong’s average rate rise of 5.9 per cent in 2014-2015.
With a similar rise, Greater Dandenong would increase the amount of money it raised through rates by about $5.5 million this year.
However, under an analysis carried out by the Journal, if the CPI cap applied, this rise would be limited to about $1.5 million.
Corporate services director Mick Jaensch said the council was “unlikely to significantly depart” from that level of rate rise in June’s budget.
He said it was “premature” to comment on the council’s ability to “deliver services and fund new capital projects” after rate capping started.
The council was “committed” to finishing the Springvale Civic Precinct redevelopment in the next five years, he said, and that plans to revamp Dandenong Oasis and build community hubs in Keysborough and central Dandenong could be delayed.
Mr Jaensch noted the “most critical” squeeze came from the reduction in Victorian Grants Commission grants, which have been frozen for three years by the federal government.
The grant contributes towards the council’s library, home-and-community-care, and maternal and child health services.
Greater Dandenong’s share had marginally fallen from $10.86 million since 2013-2014.
At the same time the services’ costs had risen by 4 per cent.
“This ongoing cost shifting places councils under enormous financial pressure to increase rates to make up the difference,” Mr Jaensch said.
Municipal Association of Victoria chief executive Rob Spence said councils would be forced to take “drastic action” such as staff and services cuts.
“The general movement in costs for councils is about 1 per cent more than a consumer’s basket of goods.
“The state government has a mandate to deliver (rate caps). We have to make sure it doesn’t damage services and activities.”
Ratepayers Victoria president Jack Davis, in backing rate capping, said most council costs were administrative.
“Stating services would be cut is hogwash.
“The administration should look at cleaning its act up and being more efficient.”
The state government has stated the cap was designed to protect ratepayers from “wasteful or unnecessary council spending”.
Any rate rises above CPI “must provide a clear benefit to ratepayers”.
Notwithstanding the Greater Dandenong’s hardship policy, about 5 per cent of rate bills had not been paid or were in arrears.
The council states that number had been “consistent” over the previous years.
