You are here

Rate Capping: The Perfect Storm for Change

Ratepayers Victoria Incorporated (RVI) is pleased to know that the legacy culling and bludgeoning of ratepayers to pay excessive council rate increases is about to end. In Victoria, rates have increased to about 80% over the last ten years, almost double NSW's 42%. "On the 14 November, RVI is hosting a ratepayer seminar (themed Reengineering Local Government) in Mulgrave, Monash. During this seminar, RVI will reveal its reform strategy, potential partners and aim to recruit project teams. For the very first time, ratepayers can stop being the silenced and frustrated stakeholder. They can and will become the new high value adding and agile solution partners in the new and reformed local government system. Change has started. There is no way back now." Jack Davis, President.

CPI capped rates and improved efficiencies are not the only benefits arising from the Fair Go Rates policy:
• Ratepayers will have greater say and influence in their council's affairs, notably setting future rate directions and underlying budget expenditure priorities, and support for justifying capped rate variations.
• The arising chain effects will also bring about higher propensity of councils to increase their collaboration, accountability and transparency (CAT) performance, which can translate into increasing good governance in councils' annual and strategic budget planning and utilisation.
• More importantly, these CAT capabilities will also help to build sustainable TRUST between councils and ratepayers, a first time milestone-breaker in local government history.

It is natural that councils and their peak bodies are nervous of the perfect storm of change coming to disrupt their status quo. However, they do not have to be alone in their rate capping journey. They can choose to engage and partner with ratepayers to help them make rate capping work and embrace continuous learning and quality improvements.

Great change involves greater challenges. There will be mistakes made, but so what. Mistakes create lessons learnt that are necessary for enabling continuous improvements, which together with effective community collaboration, are critical success factors.

RVI is forging ahead its reform plan to build grass-root capacity to help fix the currently broken local government system. With committed support from the Local Government Minister, Local Government Victoria, Essential Services Commission and now the ratepayer community, what more can councils ask for? They are in the most favourable and well supported positions to make rate capping work. In a very viable future scenario, ratepayers and councils can become agile partners in ensuring the peace, order and good governance in every Victorian municipal district. The big question is will councils and their peak bodies come to the party?

On the 14 November, RVI is hosting a ratepayer seminar (themed Reengineering Local Government) in Mulgrave, Monash. During this seminar, RVI will reveal its reform strategy, potential partners and aim to recruit project teams. For the very first time, ratepayers can stop being the silenced and frustrated stakeholder. They can and will become the new high value adding and agile solution partners in the new and reformed local government system. Change has started. There is no way back now.

Jack Davis
President

Source: Ratepayers Victoria Inc (RVI) Media Release - 21 Oct 2015

AttachmentSize
Image icon RVI.jpg3.54 KB

Comments

The greatest pressure on Council budgets is population growth. They are expected to keep providing more and more services, expand their spending, and keep blowing out their budgets.

Councils do not have the legislative powers to change laws, so State governments dump Councils with the costs of population growth, and limited powers to prevent it. So much money can be sunk into Planning Objections, to be over-ruled by VCAT and property developers, that Councils must end up reluctant to represent the rate-payers.
Dis-economies of scale end up blowing out Council costs.

Governments are reluctant to increase charges and taxes, but Councils just keep increasing rates with impunity, with no reviews.
Population growth in Australia is more a consequence of government immigration policy than what's going on in the country's bedrooms.

While our attention is diverted by "boat people" and the refugee crisis, the bulk of our population growth is arriving on our front door!
Oliver Hartwich, and a colleague from the Centre for Independent Studies, sent a survey to all 560 Australian local governments (mayors and senior executives) to ask how they responded to population growth and whether their revenues were adequate. They received 121 responses, covering a good range of metropolitan and regional councils, large and small.

More than half of respondents said they had put up their rates “to cope with population growth”. One third said explicitly that population growth “damaged their bottom line”, which is not what should happen when more potential taxpayers arrive. Indeed, economies of scale in administration might even warrant lower taxes for existing ratepayers.
VICTORIANS will be stung with an average rates rise of $67 in 2015-16. Residents of Murrindindi in the state’s northeast growth corridor will pay the highest rise of $145 on average.

According to Ian Lowe, "What seems a modest rate of population increase, well below what has been recently experienced in south-east Queensland, actually doubles the cost to the community of providing infrastructure. The population increase only adds 2% to the local council’s rate income and the state government’s tax receipts, so it is obvious why we are fighting a losing battle to keep pace with the needs of the growing population. Thurow concluded that any nation whose population increases at a rate of more than 2% will probably go backwards economically".

Why We Need to Stabilise Our Population (June 2010) by Ian Lowe | Issues Magazine