DEBATE continues about whether a State Government plan to cap municipal rate charges to inflation is in the best interest of ratepayers.
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Ararat Rural City Council is preparing to deliver its final budget before the policy comes into force next year.
Under the plan, any council wanting to lift rates by more than inflation must justify its budget to the Essential Services Commission (ESC).
The Minister for Local Government will also have powers to block any proposed rate increases.
Any move by council to raise rates above the Consumer Price Index (CPI) in its 2015/16 Budget will be highly scrutinised with two councillors already indicating their desire to see this year's rate rise tied to inflation.
Cr Glenda McLean said the CPI was a good measure for rates.
"There has been a lot of discussion about what the rate rise should be, most people are looking at the State Government's request of a rate rise of no more than CPI," she said.
"We hear a lot of people talking about how CPI is not relevant for local government because CPI is based on bread and milk.
"Conversely a lot of other people say that's rubbish and that CPI is a good benchmark for rates, I agree with that."
Upon his election to council in March, Cr Franz Deutsch said he would fight any moves by council to raise rates by more than two and a half percent.
"It is worth consideration but I was looking at say 3.2 to 3.4 percent," Cr McLean said.
"But again what the council staff, directors and CEO will be conscious of is that you can't have life both ways.
"Given the fact a lot of people have been consistently worried about the rates in Ararat, it means that we will need to have a look at what's happening in terms of the way we are spending our money.
"One of my three campaign pledges when I started was to ensure that the community felt comfortable with how we're spending their money across the entire municipality and what the priorities are."
Cr McLean said she believed the State Government plan to cap rates had been developed with the best intentions.
"I trust that Daniel Andrews and the team will endeavour to learn from some of the errors that have occurred in New South Wales," she said.
"Apparently there have been some implications for infrastructure and I trust that we will avoid those in Victoria.
"The need to justify, the need to be accountable is the new wave affecting all of local governments and we are no different."
Minister for Local Government Natalie Hutchins said the rate capping policy was about ensuring a fair go for all ratepayers.
"As we committed before the election, the Andrews Labor Government will require councils to cap rate increases at inflation.
"Any council wanting to increase their rates above this level will need to justify why. It's not a hard ask."
Ms Hutchins said the cap will come into force in 2016/17, with appeals to be considered by the ESC.
"Unnecessary rate rises before this time could affect councils' eligibility for future exemption," she said.
"The State Government has tasked the ESC with developing a framework for the policy - including under what circumstances a council could be given an exemption.
"The ESC has also been asked to consult with local councils, peak bodies and ratepayers, which will include regional listening posts and forums.
"Ratepayers rightfully expect a responsible approach to rate increases. Just as they responsibly manage their household budgets, they expect their council to do the same."
Member for Ripon, Louise Staley said she wasn't convinced that rate capping was the way to go.
Ms Staley said she has met with several of the seven rural councils she represents and they had expressed concern about the prospect.
"People are concerned about how they will manage the inevitable asset gap at the council level," she said.
"We have councils that are setting budgets now and they really don't know what their forward revenue will be."
Ms Staley said she could see some merit in the plan given the large rate increases experienced by ratepayers of some municipalities in recent years.
"I think we need to just wait and see how the government implement these measures," she said.