THE mayors of Wodonga and Indigo claim rate pegging has “failed” in NSW and would drastically impact on community services if introduced in Victoria, North East councils say.
State Opposition Leader Daniel Andrews said, if elected in November, Labor would require councils to seek state permission to raise rates above inflation, now about 2.8 per cent.
Wodonga mayor Rodney Wangman and Indigo mayor Bernard Gaffney predicted such a move would lead to service delivery deteriorating.
They asked who would pick up the slack on the many services that councils subsidise, such as swimming pools, sports grounds, health and community services including meals on wheels and heritage buildings.
“Will the state government pay for these or will they just let them lapse into disrepair?” Cr Gaffney asked.
“This is just a populist move that will deteriorate services in our community.”
NSW councils have operated under rate pegging of general rates since 1976.
The Independent Pricing and Regulatory Tribunal sets a new peg annually, although individual councils can apply for exemptions, as has Albury in the past and Corowa is currently.
The NSW cap for 2014-15 is 2.3 per cent, which Albury is proposing, though the city’s rates across the board will rise 5.5 per cent.
Cash-strapped Corowa Council is seeking exemption to raise general rates 7 per cent a year for four years.
Cr Wangman said NSW was “evidence of the failure” of capping rates.
“We (Wodonga Council) receive one of the lowest levels of government grant revenue in the state,” he said.
“If that’s the situation and they’re going to cap rates, is the opposition proposing to improve grant revenue?
“I’d like Labor to lay out for us what services won’t be provided and what level of infrastructure is provided in the budget.”
Wodonga has come under criticism from ratepayers for its rates rises and spending in recent years — rates rose 7 per cent in 2012-13, and 4.75 per cent this financial year, with borrowings of almost $9 million planned through to 2017.
Rates are projected to rise by another 4.75 per cent in 2014-15 and 4 per cent the following two years under a long-term strategy.
Rates revenue accounts for about 60 per cent of the council’s budget.
Cr Wangman rejected Mr Andrews’ assertion this week that capping rates would lead to greater transparency of council spending.
“Each year the council puts out publicly our projected rate increases,” he said.
“Anything anyone wants to know is there in black and white.”