Budget management has a lot to contribute to rate increases – fixing budget and service management deficiencies, the manageable causal sources of rate hikes, is the first priority. This means fundamental reforms in budget methodologies, keeping to core services for rate charging, not overspending given state budgets for other services, changing work culture to spend what is affordable, increasing performance accountability & reporting, etc. Ratepayers have yet to see the new emerging trend in councils creating debts for the community, which is being revealed more into public eyes by the extraordinary blowout of Council employees’ defined benefit superannuation liability!
We encourage ratepayers to log their budget review experiences and leave an audit trail of transparency and accountability issues. We will publish this audit trail in this website – the information will be used as evidence to assist RPV’s discussions with the Minister of Local Government and also to help the Auditor General Office access case studies for their on-going audit reviews of Local Government functions. The first audit trail is the Monash case.
Rate hikes are happening in many Councils across the country. We review a few budgets in several cities and are finding a common pattern – there is no transparent sound justification underpinning annual rate hikes. Some Councils are also misleading ratepayers in budget review – Councillors already agreed on rate increases and consequent budgets when Council allow the process of public review to occur. The process is not democratic nor is transparent and is most misleading.
The Municipal Association of Victoria (MAV), an association of all Victorian councils, thinks that council rates are property taxes and yet many Councils charge rates based on the costs of services. MAV also states that “An increase in property values does not cause a rate rise. Council budgets are pre-determined to meet expenditure requirements, and include any potential rate rise. Property valuations are revenue neutral – they are used to distribute how much each ratepayer will pay, according to the value of their property compared to other properties within the municipality.“ Ratepayers need to see market value and operating cost drivers of their annual rate increases in their rate statements, not hook winked by obscure excuses in news and Council website media.