Hume council will lose $37 million over the next four years if rates are capped to the consumer price index (CPI).
Hume’s chief executive Domenic Isola said a cap on municipal rates tied to CPI would not allow the council to address the needs of the growing outer north.
“If rates were capped to CPI levels, our community would be disadvantaged because Hume’s new areas could miss out on facilities that many other established suburbs in Melbourne take for granted,” he said.
In January, the state government directed the Essential Services Commission (ESC) to develop a framework for capping municipal rates. Submissions from councils were due before May 15.
Hume’s submission contends CPI is not an acceptable basis for setting a cap on rate increases because it doesn’t account for why councils need to increase them, including the increasing costs of delivering services to growing populations, more capital works spending and higher levels of borrowing repayments.
The council told the ESC last week that it believed a different cap on rates, not linked with CPI, could work. However, it remains concerned that capping rates will add an extra layer to council budgeting and planning.
ESC will release a final report in November.
