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Question without Notice: Local Government Rate Cap Impacts

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Samantha Ratnam
Leader of the Victorian Greens
24 February 2022

Dr RATNAM : My question is to the Minister for Local Government. Our local councils deliver critical services to our communities and are staffed and governed by some of the most dedicated people you will ever meet, but all too often they are treated as convenient deflections for the failures of state governments. Minister, the existing rate cap on local councils has been demonstrated to suppress wages and jobs growth in a sector that has a predominantly female workforce. It is inconsistent with the need to be lifting wages, promoting and protecting equality of work for women in our economy and ensuring local communities have access to quality services. On top of the rate cap the government has now announced it is cost shifting its responsibility for public housing maintenance onto councils. As our economy grapples with low wages, a persistent gender pay gap and the need for increased investment in local services, why is your government continuing a policy which exacerbates wage suppression and job creation suppression in a predominantly female workforce?



Mr LEANE (Minister for Local Government): I thank Dr Ratnam for her question. I am not being difficult, but I am assuming it is the rate cap policy that is the concern, or is it the potential new policy?


Dr Ratnam: The first part is about the rate cap. I mentioned both.


Mr LEANE: I am happy to touch on both. As I said, I was not being difficult, I just wanted to make sure I am answering the question properly. As far as the rate cap is concerned, it has actually been a popular initiative for ratepayers. In the period beforehand it could have been a way for councils to just decide they want to build a lot of things that they would like to build and then, when they apply a formula, the formula ends up showing there could be a 10 per cent plus increase to ratepayers in those local government areas and those aspirations were not particularly the aspirations of the ratepayers. The cap is going to continue to be our government’s policy, but I can say that the recent Auditor-General’s report into the financial health of the local government sector and all local governments has actually shown to the credit of councils that despite the challenges of the last two years most local governments are in a quite healthy financial position to the point that some actually— as I said, well done to them—have got quite healthy surpluses. I think the argument about the rate cap and how it affects the financial sustainability of local governments does not ring true when you look
at the reports from the Auditor-General.


As far as the other part of your question goes—the concern around a potential new initiative—I think I answered in a question previously from another member that it is not unique at all for me to have had conversations with the local government sector about it. They are actually really passionate about there being more public housing in their particular local government areas, and I think the position that we would like to take is that all levels of government should contribute to the public housing stock in certain ways. But as you would know, Dr Ratnam, there isstill potential for discussions going forward.


As I have committed in a previous answer, I pride myself in being accessible, and I will be accessible
to councils and peak bodies if they want to discuss with me their contemporary concerns around what
was flagged last week.


Dr RATNAM: Thank you, Minister, for your answer. With respect to your answer, populism should not come at the cost of job and wage suppression. As I noted in my initial question, on top of the rate cap the government have announced they want councils to cover the cost of the government’s decade-long neglect of public housing, with the announced social
housing rates exemption set to financially devastate so many of them. This will shift the cost of public housing maintenance from government, where it belongs, to local councils, which will now be under even more financial pressure to provide important services to social housing residents and their municipalities. In my electorate of Northern Metro alone, this is what it is going to cost councils: City of Yarra, $3.8 million in a year; City of Darebin, $3.5 million per year; Moonee Valley, $2.8 million;  Hume, $2.87 million per year; and the list goes on. I have been meeting with councils and the Australian Services Union in recent weeks about the impact of the rate cap and now this disastrous exemption announcement. Minister, why is your government asking councils to make the impossible decision of closing critical services and cutting jobs to pay for the government’s responsibility for public housing?


Mr LEANE: Thank you, Dr Ratnam, for the question. To address the populism point that you made, there is no doubt that there are a lot of ratepayers under hardship as well, and I think that was part of the policy around the rate cap.


Members interjecting.


Mr LEANE: I am trying to answer Dr Ratnam’s question with respect. I stand by my substantive answer. I respect that local governments, peak bodies and other bodies have disagreements with government policy. I respect that. I respect that they have concerns. As I have said, I stand by my substantive answer. I am more than happy to have those further discussions with them

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Samantha Ratnam
Leader of the Victorian Greens
24 February 2022
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