East Gippsland Shire asked the people to have their say on the Budget. The calls for ideas were open from January 31 to February 21.
This, according to a local news contributor from the public wishing to create discussion about the Budget, in effect was a fishing trip to bring ideas back to council for consideration by the duly elected council members.
The final budget will not be presented to the councillors for adoption until Tuesday, June 24.
“Residents and ratepayers need to be aware the financial trend over the past five years reflects cost blow outs and increases in rates and fees,” he said.
“What needs to be considered is that the current financial trend will impact the cost of living for all in terms of home ownership affordability.”
Rate increases on properties are capped by the Victorian Government. The 2023/24 rate cap was 3.5 per cent. Council rates are calculated
by multiplying the property’s valuation, determined by independent valuers appointed by the Valuer-General Victoria (VGV), by a “rate in the dollar” set by the council.
“When you look at the 2023/24 Annual Financial Report from council you will see that rates increased by 6.1 per cent. One might ask how is this possible? The cap applies to the dollar unit rate only that is applied to the Capital Improved Valuation of the property, so an increase in the number of rateable properties and other rateable fees do not fall within the constraints of the cap.
“The rates in our municipality are high when you compare it to many other municipalities, for example a similar value property in the Mornington Shire would pay approximately 50 per cent of the rates we pay.
“In fairness council has responded to my question on this previously with the explanation that we have a large area with fewer population per square kilometre. We therefore need to look at costs and what is happening in that space.
“Are council costs being minimised and what are the services that council should be involved?
“The 2023/24 financials show that wage costs have increased 11.3 per cent over the prior year and over the past five years 37 per cent. If we think back to the 2019/20 years we had several disasters. Bushfires and COVID were a major issue for council and funding was provided by both Federal and State governments.
“Resources were employed by council to help deal with the issues facing our local community at that time. Wage costs increased significantly in 2020/21 with an increase over the prior year of 10.2 per cent. The wage cost base has not reduced in subsequent years as would have been expected with the emergency abating, but instead growing year-on-year by more than the CPI.
“One must ask why are wage costs continuing to increase over and above CPI?
“A similar picture appears when you look at the increases on expenditure in material and contractors. The 2023/24 increase over the prior year is 8.9 per cent.
“When you also consider what is happening with the council’s investments it might be a surprise to some that that the investments have grown significantly over the past five years. The amount reported as invested in 2019/20 was $47m and this amount has grown to $128m in 2023/24, with investment income increasing from $1683k in 2019/20 to $7348k in 2023/24.
“In conclusion it would appear to me that that council has allowed costs to balloon out while at the same time growing its investments. Our newly elected councillors are failing us by not addressing the cost blowouts and the growth in investments.
“The 2025/26 Budget is an opportunity for our councillors to address the adverse financial trend and cost to its ratepayers. Council needs to make a correction and the 2025/26 Budget is the tool to give us a one-off rate reduction and set the cost base at a more affordable level. This will require our councillors to push back on the Budget submission by reviewing the activities that council is getting involved and remove excess cost.
“Government is always good at adding and innovating, but seems to fail on reducing cost.
“In summary the Budget is the basis for council to set rates and we need our councillors to push back to reset the base and reduce costs.”
