MAV calls for rate capping transparency

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Municipal Association of Victoria (MAV) has cited new data that reveals Victorians faced an average State tax increase of almost six per cent every year for the last decade, while analysis shows NSW rate caps have devastated the local infrastructure.


Cr Bill McArthur, President of the Municipal Association of Victoria (MAV) said the data underscores the need for the Andrews Government to be more transparent in explaining to Victorians the full picture about State taxes and in particular property taxes, not just singling out municipal rates.


State property taxes (land tax and stamp duty) rose $2.7 billion over the last decade to $5.9 billion. Total State taxes increased an average 5.59 percent a year, but State property taxes grew by an average 7.13 percent for each of the last 10 years.


Average Victorian council rate increases tracked below this at 5.99 per cent a year for the past decade according to the Minister for Local Government.


Having the necessary revenue to provide community services for a growing and ageing population is a common challenge facing all levels of government. Revenue must grow to meet the rising demand for services and the number of people accessing them.


Yet in NSW where rate capping was introduced in 1977 communities have had services cut back, asset maintenance backlogs are significant and increasing, infrastructure to support growth is not being provided and the sustainability of a large proportion of councils is in doubt.


Under CPI rate caps imposed by the New South Wales Government, NSW councils effectively spent only 55 percent of the average capital expenditure by local government in other states leaving a multi-billion dollar black hole for future generations. Welcome to the unintended consequences of rate capping.


Cr McArthur said, “The MAV and councils are not opposed to creating a fairer, more sustainable system for ratepayers and indeed all taxpayers. Councils don’t mind scrutiny and know they need to be mindful of their costs.


“However, the conversation must mature with the Andrews Government because when State and local government work in partnership it results in better outcomes for our communities.


“Taking funding away from councils while constantly criticising them is unconstructive, particularly when the State continues to reap a massive windfall each year from its own property taxes.


 “To expect councils to continue delivering services for and on behalf of the State while under-funding them and cutting back councils’ ability to fund them is a betrayal of the Andrews Government’s obligations to all Victorians.”