Council rate increases are capped to reduce pressure on household budgets.
Minister for Local Government Melissa Horne announced the rate cap of 2.75 per cent for 2024-25 under the Labor Government’s Fair Go Rates system.
“Fair Go Rates mean households have certainty over their council rates and in 2024-25, the increase will be kept to the forecast inflation rate.”
The increase will be capped at the forecast Consumer Price Index for the next financial year.
The rate cap limits the amount all Victorian councils can increase their total revenue from general rates and municipal charges.
The City of Greater Dandenong Council has met the cap rate of 3.50 per cent for 2023-24 and noted the new cap for the 2024-25.
In a statement, council also made it clear that the rate cap of 2.75 per cent doesn’t mean each rate payers rates will be increased by the percentage.
“The rate cap applies to Council’s total rate revenue – not individual properties. Individual rates bills may increase or decrease by more (or less) than the capped increase, due to changes in the Capital Improved Value of properties,” mayor Lana Formoso said in the statement.
“In recent years, Council’s costs have risen significantly more than the rate cap. This poses a challenge for managing Council’s budget.
“At the same time, Council appreciates that local ratepayers are also facing pressures.
“We understand that our local businesses are experiencing volatile markets and our home-owner rate payers are facing pressure from interest rate rises and other cost of living increases.
“Council is working on a 2024-25 budget that will continue to deliver quality services and projects for this community, while managing a tight budget responsibly and sustainably.”
Ministerial Guidelines have also been released for service rates and charges for the collection of kerbside waste and recycling from properties.
Service rates and charges used to fund waste collection and management are not subject to the rate cap.
The Guidelines detail that services that provide a general benefit to the whole municipality, such as tree planting, graffiti removal and street cleaning, should not funded by service rates or charges to individual ratepayers.
The Labor Government introduced the Fair Go Rates system in 2016 to reduce cost of living pressures and that has been achieved.
“The rates cap has made a real difference to household budgets over the past eight years and we’ll keep working to reduce costs for families,” Ms Horne said.
In the decade before the introduction of the rate cap, council rates increased by an average of 6 per cent per annum.
The average rate cap between 2016-17 and 2023-24 was 2.25 per cent.
Councils are able to apply for a higher rate cap if they can demonstrate community support and a critical need for spending on services or projects that require a rate rise above the capped amount.
There were no applications for an exemption this financial year, when the cap was set at 3.5 per cent.
