THE state government has set the cap on Victorian council rate rises at 2.5 per cent, matching the Consumer Price Index for 2019-20.

Minister for Local Government Adem Somyurek said the government has ended the uncontrolled rate rises seen over the past decade and put the power back in the hands of Victorian families.

The Essential Services Commission recommended that there be one cap across the state – and as per previous years, has applied the CPI forecast by the Department of Treasury and Finance.

An independent report by the ESC released late in December found that nearly all Victorian councils complied with the 2018-19 rate cap – proving that the government’s Fair Go Rates policy is working.

Fair Go Rates is encouraging councils to improve accountability and transparency, ensuring they are listening to their communities and delivering the services that matter most.

In the decade before Labor introduced Fair Go Rates, council rates increased by an average of 6 per cent per annum.

Since then, the rate cap has been in line with CPI – 2.5 per cent in 16/17, 2.0 per cent in 17/18 and 2.25 per cent in 18/19.

The City of Greater Bendigo is one of many regional and rural councils to raise the rate cap policy as a constraint upon the local government sector and the challenges associated with managing growth and maintaining assets.

Mr Somyurek said the new cap is about getting a fairer outcome for ratepayers and encouraging councils to work with their communities to deliver the things that matter most to locals.

The Victorian Local Government Association said is remained concerned that a single rate is not sufficiently sensitive to local needs of the 79 municipalities across the state.

It claims communities in some rural shire councils have reached their capacity to pay for ongoing increases in their rates while some councils, particularly those in the urban growth corridor, need additional resources to fund critical infrastructure such as footpaths and drainage to meet the demands of population growth.

The organisation has called on the state government to review the rate capping policy by the end of 2020, instead of the planned review date of 2021, so that incoming 2020 councils are in a position to respond appropriately to their local needs.