Victorian councils keep rates increases within cap for fourth consecutive year

The Essential Services Commission today released its annual Council Rate Cap Compliance Report, showing each of Victoria’s 79 local councils kept their rate increases within the 2.75 per cent cap for 2024–25 set by the Minister for Local Government.

The Essential Services Commission monitors and reports on Victorian councils’ compliance with the rate cap under the Fair Go Rates system.

Under the system, the Minister for Local Government sets the average rate cap each year. Councils must keep their rate increases within the cap, or seek approval to increase average rates above the cap. No council has applied for a higher cap since 2019–20.

Essential Services Commission Chairperson Gerard Brody says it is pleasing to see all Victorian councils again acting in compliance with the rate cap.  

“This is the fourth consecutive year all councils have been compliant with the rate cap. Ararat Rural City Council chose not to increase its rates, and the remaining 78 Victorian councils raised their rates close to or in line with the 2.75 per cent cap.

“As consumers continue to grapple with cost-of-living pressures, it is important that councils work proactively with ratepayers experiencing hardship and provide accessible assistance programs. Amidst these challenges it is positive to see councils continue to deliver services to residents and businesses while keeping their budgeted rate increases within the cap.”

While waste service rates and charges are not included in the rate cap, the commission monitors and reports on councils that change the structure of their service rates and charges.

Greater Shepparton City, Hepburn Shire, Mansfield Shire, Mildura Rural City and Towong Shire Councils introduced new service charges to recover costs for waste management services that the councils had not previously provided.

Overall, councils budgeted to increase service rates and charges revenue by an average of 3.2 per cent per rateable property, a significantly smaller increase compared to last year’s increase of 16.7 per cent. This outcome was influenced by a range of factors. Some councils identified compliance with the Minister’s good practice guidelines for the use of local government service rates and charges that took effect from 1 March 2024 as one reason.