The Municipal Association of Victoria (MAV) says yesterday’s State Government rate cap announcement of 3% again highlights the significant financial challenges facing councils and local communities in 2025.
While it’s a slight increase – up from 2.75% in 24/25 – Councils will have little relief from the extreme financial pressures they have faced in the last four years, said MAV President, Jennifer Anderson.
She said MAV will continue to call for a significant review of the rate capping system.
“With Minister Staikos getting his feet under the desk over summer, the MAV is very keen to have a constructive discussion about how we can reform the rate cap to be more fit for purpose for our diverse communities across Victoria,” President Anderson said.
“Using CPI to inform the rate cap simply doesn’t work for councils. It’s not a true reflection of the increased costs our sector faces in construction, materials, staff wages, and services.
“The MAV is working on a more accurate Local Government Cost Index for Victoria and is keen to share this work with the State Government to improve how the rate cap can be re-imagined in the future.”
She said the current rate cap fails to take into account the vastly different needs of councils across the state.
“Some councils are still facing exhaustive repair bills from natural disasters, others are in desperate need of upgraded or new infrastructure. Setting a single rate cap does not account for the broad variety of these challenges, let alone the role that local governments play in supporting the economy.”
“Beyond a more accurately calculated rate cap, the MAV is committed to working with both state and federal government to ensure the financial sustainability of councils in 2025,” President Anderson said.
