Questions and Answers: Banyule rates

1. Why are my rates higher than CPI or inflation rate?

Council services are affected by growth in construction, material and wage costs, rather than changes in common household goods and services which makes up the CPI.  Materials such as asphalt and concrete have had increases in the order of 10% and higher over the last year.

2. How do my rates compare to surrounding Councils

A comparison with neighbouring and northern metropolitan Councils reveals Banyule rates (average rates) are significantly lower than most and comparable with three other Councils.

Council Average rates 2014-2015* $ Higher than Banyule
Banyule $1,639
Nillumbik $2,472 $833
Boroondara $2,052 $413
Yarra $1,915 $276
Manningham $1,864 $225
Hume $1,737 $98
Moreland $1,645 $6
Whittlesea $1,577 -$62
Darebin $1,598 -$41

Average rates includes rates, municipal charges and waste management charge and is calculated by Municipal Association of Victoria.

3. How does Council get its income and what is it spent on?

Income for Council activities is generated from 4 sources:

  • Rates (two thirds of all income)
  • Fees and charges
  • Grants and subsidies

Other income (includes rental and sale of property, interest etc)

Councils, in general, collect 3.5% of all funds raised by the three tiers of Government.

Council undertakes the most transparent process of all three tiers of Government in determining its rates, including advertising and listening to objections prior to adopting its rates each year.

Expenditure for Council activities is split as follows:

4. How does Council determine priorities for spending rates?

The Banyule City Plan was developed after extensive community consultation setting out a clear strategic direction over a four year period until 2017.

Click here to view the City Plan for 2013-2017

All plans require a budget to ensure that the finances available can meet the City Plan’s objectives.

5. What were the main priorities of the City Plan?

One of the main community responses to the City Plan was that residents said that they wanted increased spending on infrastructure.

Council has approved as part of the City Plan a long term Asset Management plan to ensure that our ageing infrastructure is maintained.  This year $42.76 million will be spent on capital works throughout the City.

6. What are some of the other financial impacts facing Councils?

Whilst Council undertakes a very transparent process in deciding its budget the same cannot be said for other levels of Government and utility companies.  Council continues to absorb cost shifting from other level of Governments.

 

A few examples of cost shifting are:

Decline in Federal Government Grants

in 1993/1994 Local Government received as a pool a total of 1.2% of Commonwealth tax distribution.  This has decreased by almost half to 0.62% in 2011/2012 and was capped in 2014/2015 with no index.

The municipal landfill levy

The State Government impose a levy on all waste going to landfill, which is currently around $63 per tonne.

School crossing supervisors

Used to be funded by State Government 80% and Council 20% when first introduced.  Now Council funds 80% and State Government 20%.

Libraries

Funding for our community’s library services have, over the last 30 years, decreased by 40%. 30 years ago it cost $180,250 a year to run our libraries today it costs over M$3.8.

HACC (Home and Community Care) services and meals on wheels

As our community is ageing, like much of Australia, council increases spending by 10.2% annually to cater for our community’s needs. In 2009 total spending on HACC services was $2,079,321 but in 2013 budgeted net costs are over M$4.2. In 1980 local government, through rates, funded 20% of HACC services. Now local government supply 34% of the costs which is an average increase of 8.4% annually.

Maternal and Child Health services

Is contracted to be 50:50 split between our community and the government, but a 2010 study showed a ratio of 65:35 so we are inadvertently paying too much.

Immunisations

It costs our community $51 for every vaccination. $12 of that is covered by the state and federal government ($6 and $8 respectively). So, $39 is the cost to ratepayers and in a community that is growing means more costs are incurred.

Superannuation costs

Local government must also maintain a ‘fully funded’ superannuation scheme for Council employees who were part of the compulsory defined benefit plan that closed in 1993.

Council contributed almost $10 million dollars to this scheme during 2013.

Rate Capping

We need to carefully monitor our economic sustainability in upcoming years particularly in the light of rate capping being imposed on local government from the 2016-2017 financial year onwards. Council will clearly adhere to what is legislated but foreshadows for our community the pressure this is likely to bring to bear on us to maintain current service levels and our capital works program.

Council notes that there is no capping imposed on State Government services such as utilities, education, emergency services, public service where it is estimated that wage costs will increase by over 7% in 2015/2016.