COUNCIL money and therefore services will be lost if new Victorian draft plans for a rates cap are adopted, according to a North East civic leader.
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Wangaratta’s chief administrator Ailsa Fox said the council had not yet discussed the proposal, which was released on Friday.
But she said in general terms capping rates was “going to cost us a lot of money”.
"In the long term it will be an accumulative effect of loss of money, which in turn means loss of services or loss of something to the community," she said.
In its draft report, the Essential Services Commission made 11 recommendations related to the cap’s design and introduction, proposing one rate cap that applied equally to all Victorian councils.
The commission recommended that general rates and municipal charges be subject to the rate cap but special rates and charges, revenue in lieu of rates and the fire services levy not be included.
Mrs Fox said residents might misunderstand the implications of capping rates.
"Many of the community are under a misapprehension about the actual amount of cash that a one per cent rate rise brings into council," she said.
"On an average rate bill, the savings through rate capping if it was at CPI would be about 42 cents per week.
"So it's not going to create a big saving to the households that the government are touting that it will."
Indigo mayor Bernard Gaffney said his council’s strategic resource plan for 2015-16 had indicated a rate increase of six per cent.
"We cut that down to 4.5 per cent without reducing services, it was just trimming from each department," he said. "If and when rate capping comes in, it would be expected that services would have to be cut.
“What those services are, council will decide with the next budget."
Submissions in response to the Essential Services Commission draft report A Blueprint for Change were due by August 28, chairperson Ron Ben-David said.
