Q: When is a 2 per cent municipal rate cap not a cap on rates?
A: When a council adds another 8900 rateable properties to its income stream.
The City of Melbourne will collect an extra $16 million in property rates next year.
It plans to pull an extra 11.3 per cent in residential rates and 3.7 per cent in non-residential rates – earning an extra 6.4 per cent from rates overall.
In 2016/17 it earned $254.1 million from rates. Next year is it planning on $270.4 million – $100.4 million from households and $170 million from businesses.
A 2 per cent increase in its overall rate take would mean a reduction in the amount it levies against the value of each property. However, the City of Melbourne has announced its intention in 2017/18 to charge 4.15 cents for every dollar of net annual value (NAV) for residences (up from 4.07 cents) and 4.57 cents for every NAV dollar from non-residential properties (up from 4.48).
The State Government moved to cap municipal rates last year.
A spokesperson for Local Government Minister Natalie Hutchins said the council’s approach was within the guidelines.
The spokesperson said: “The extra income from new households is required by councils to pay for the increased service demand, more people means more bins to be collected, more requests to borrow library books, a greater demand for maternal and child health services and more wear and tear on roads, footpaths and parks to repair.”
The council draft 2017/18 budget will be considered at a Future Melbourne Committee meeting on Thursday, June 15.