Victoria’s councils fall into line on 1.5pc rate cap for 2021-22

All 79 Victorian councils will be held to the approved 1.5 percent rate cap for the next financial year ahead, the state’s independent regulator said last week.

The Essential Services Commission (ESC) has confirmed that the 31 March deadline for applications to exceed the rate cap set by the State Government has passed without any requests being received.

The ESC’s executive director of pricing, Marcus Crudden, says it is the second year in a row with no councils applying for a higher rate cap.

It comes at a time when some councils also limiting rate increases for the current year to below-approved levels, acknowledging the financial impact of the coronavirus pandemic on households and businesses.

In 2020-21, 16 of the state’s 79 councils kept rates steady at 2019-20 levels, and several others restricted increases to below the cap, due to the coronavirus pandemic.

With no applications for the upcoming 2021-22 financial year, all 79 councils will be subject to the default rate cap for the first time since the introduction of rate capping in 2015.

Three councils – Warrnambool, Towong and West Wimmera – currently have higher caps, but these all expire on 30 June 2020.

The average rate cap is the maximum percentage increase allowable in councils’ average rates for the forthcoming financial year.

A recent ESC report showed that in 2020-21 most councils complied with the current rate cap, or an approved higher cap.