Image from the ROPP election campaign in 2020.
According to a report paid for by Australian Services Union (ASU), the Victorian Government’s Fair Go rate cap has cost jobs in the local government sector. The ASU commissioned the Australia Institute’s Centre for Future Work to investigate the impact of the Victorian Government’s Fair Go rate cap which was introduced in 2016 to protect consumers from excessive increases in council rates. The cap limits increases in rates revenue to the Consumer Price Index (CPI).
The report titled “Putting a Cap on Community, The Economic and Social Consequences of Victoria’s Local Government Rate Caps Policy” concludes “The Victorian State Government’s policy to cap the rates of local government has cost the Victorian economy 7,425 direct and indirect jobs in 2021-22” The report also states, “The rate cap policy, imposed by the Victorian state government on local governments, interferes with the mission of service delivery and expanded, secure employment”. (Source: https://australiainstitute.org.au/report/putting-a-cap-on-community)
The ASU is the representative body for local government workers and is lobbying to abolish or amend the rate cap because it says their members “are increasingly overworked and underpaid in a way that is not in step with the broader public sector”.
With its tongue firmly planted in its cheek, the Ratepayer of Port Phillip (ROPP) ran an election campaign in 2020 asking, “How many council staff does it take to change a light bulb?” The campaign reported that Port Phillip rates are excessive compared to neighbouring Councils. This is because Port Phillip Council spends more than its neighbouring councils and the largest cost is employees. Benchmarked against other councils, COPP has much higher staff costs per resident. Does anyone kid themselves that Port Phillip needs 48% more staff per resident than Stonnington, 63% more than Glen Eira and 94% more than Bayside?
Therefore, it is not surprising that the study commissioned by the ASU is being used by the ASU for the benefit of their members. The study argues for the abolition of the rate cap to grow more jobs. This is offensive to those who pay rates and enjoy the protection of the rate cap. If the ASU had its way and thousands of jobs were added to Victorian Councils’ payroll, it would mean ratepayers would have to cough up hundreds of millions of dollars in additional rates annually.
Local government has been politicised by vested interested such as the ASU and political parties. ROPP was formed to elect Councillors to represent residents and businesses and not these vested interests. Since before the 2020 Council election, ROPP has set out to ensure ratepayers are armed with the facts about how their rates are spent.
Let’s bust some myths that are floating around COPP:
Myth 1: Services will be cut if Councils don’t get enough rates.
Reality: Councils needs to learn to live within their means like ordinary businesses and residents do. If times are tough, they need to evaluate choices and put some ‘pet projects’ to bed.
Myth 2: Councils need more staff as they deliver services like roads, libraries, planning etc
Reality: Many Council employees are employed delivering services to residents. But a large number are employed to write reports, commission research or promote the Council.
Myth 3: Council costs are increasing more than the rates cap, and they need a rise to keep up with cost increases
Reality: Governments, businesses and households are facing a reality of higher cost of living pressures after a long period of a benign inflation environment. Other levels of Government, not to mention businesses and taxpayers, have had to adjust to these higher cost of living pressures and so should the City of Port Phillip.
Myth 4: additional jobs can be created at no cost
Reality: They would require a huge additional tax burden in higher rates taken out of the pockets of local residents and businesses.
The ASU find the reality of budgeting and sound financial management to be an inconvenient truth. In response to our election campaign, the President of the ACTU, Michelle O’Neil, campaigned against ROPP endorsed candidates in a social media video during the 2020 Port Phillip Council elections. More recently the ASU is paying for research from the Australia Institute to confirms its desired outcome: more jobs for their members.
What do you think? Do you think residents can afford an uncapped rates system that would allow Councils to get away with amassing an even larger number of staff? Let us know your views at ppm.editor@gmail.com .
