Daniel Andrews’ rate capping policy a shambles

Shadow Minister for Local Government, David Davis

Yesterday’s public hearing of the Standing Committee on Environment and Planning became stormy when the Opposition demanded the Essential Services Commissioner table his rate capping advice to the Minister for Local Government.  ESC Chairman, Dr Ron Ben-David point blank refused to table this advice.

What is clear, now that this previously secret advice has been made public today (see here), is that the Government’s rate capping policy is in complete disarray with Minister Hutchins having ignored her own process and the advice of the Essential Services Commission.

The truth is that Minister Hutchins’ cap figure is entirely arbitrary.  It bears no resemblance to actual inflation, which increased by only 1.1% in the last full financial year.  Nor does it give any concession for wage price costs, something councils, and the ESC itself recommended be taken into consideration.  Nor does it respond to the ESC’s own actual recommendation.

Minister Hutchins must now release publicly all the advice on which she relied – advice that until now she has kept secret

Quotes attributable to the Shadow Minister for Local Government, David Davis MP:

The Essential Services Commission’s advice confirms everyone’s worst fears.  The future financial viability of Victoria’s municipalities is hostage to the whim of Natalie Hutchins.

Anyone expecting anything different from this completely arbitrary outcome when it comes to councils’ requests for variations to the rate cap is similarly sure to be disappointed.

If Minister Hutchins chose to ignore Essential Service Commission advice on the appropriate rate at which to cap increases in council rates, why would she pay any heed to its advice about varying that cap?

Labor’s inflexible, one size fits all rates cap is completely arbitrary and takes no account of particular challenges confronted by individual councils, including wage costs.

What is the point of the elaborately constructed and costly ESC rate capping and variation process if it is to simply be ignored?

While the State Government has sought to cap council rates it has simultaneously been cutting state government financial support for local councils and, in breach of Premier Andrews’ election promises, jacking up state government taxes like the fire services levy.

Media contact:  David Davis                  0419 000 212         david.davis@parliament.vic.gov.au