FORMER Indigo mayor Bernard Gaffney has criticised the local government for not following other North East councils and making "hard decisions" with its budget.
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His attack came as Indigo Council passed its 2016-17 budget which includes a 2.5 per cent rate rise, matching the cap imposed by the Victorian government.
At Tuesday night's shire meeting, Cr Gaffney said the council being able to forecast a cash deficit of $170,000 down from $600,000 showed the value of capping.
"I never thought I would be a fan of it, but I certainly am now," he said.
Cr Gaffney successfully called for the council's chief executive to present a plan to next month's meeting to cut spending by $1 million.
He also wants the council to negotiate interest rates lower than 5.25 to 7.8 per cent on repayments for its overall debt of $4.875 million.
"When you look at other surrounding shires, Wangaratta has made hard decisions, Towong has certainly made hard decisions and Alpine Shire has certainly made hard decisions," Cr Gaffney said.
"But I can't see where Indigo Shire has made any of those hard decisions.
"We're a similar size to Alpine Shire, in population and also area.
"Alpine has got zero borrowings, Indigo Shire Council has an effective full-time staff of 140, Alpine Shire has 103.
"The latest budget for Indigo Shire is $12.99 million, for Alpine Shire it's $8.9 million."
Chief executive Gerry Smith responded to Cr Gaffney by noting the budget was prepared on advice.
"In terms of the hard decisions, we've actually prepared this budget based on the guidance the council has given us," Mr Smith said.
"You made reference to Alpine Shire and they have certainly done a terrific job in reducing their operating costs over the last couple of years.
"I would point out Alpine Shire has a lower population than Indigo's, it's rate revenue this financial year is actually a couple of million dollars higher than Indigo's."
Councillors Barb Murdoch and Peter Croucher praised the budget and its trajectory of debt reduction.
"I'm a musician, I'm not so much a financier and the summary that is there certainly satisfies me to say that we're heading in the right direction," Cr Croucher said.