Shire of Mundaring rejects ratepayer push for rates cap at CPI

Shire of Mundaring.
Shire of Mundaring.

COUNCILLORS have rejected a push by ratepayers for the Shire of Mundaring to cap rate rises at the consumer price index (CPI) over concerns core services will be axed.

It followed a successful motion by Mt Helena resident John Bell at the annual electors meeting last December that requested council adopt a formal position that all future budgets would not normally exceed the CPI and that this position was used as the basis for the budgeting process.

The Shire is forecast to increase rates by 5 per cent over the next two years with rate rises decreasing to 2 per cent by 2025-26.

Mr Bell said councillors had ignored the voice of the community and called for fresh blood to stand in the October council elections.

“This issue will not go away and it will be a deciding factor at the council elections in October,” he said.

“We need to try to encourage all new candidates to commit to a platform of keeping rates at CPI and ensuring the council is more efficient.

“There is a group of councillors that have ignored our petitions, our motions and the voice of the community and they need to go in our view.

“After the election we can then resubmit our motion on limiting rate increases to CPI.”

Councillor James Martin said it was his personal opinion the Shire should draft a second budget that increased rates by CPI but highlighted services areas would suffer or be cut because of the lower rate rise.

“This would have presented to the community some options of whether we wished to accept the reduction in services or continue on paying rates above CPI,” he said.

“Arguments rate rises are equivalent to only one cup of coffee per week stands with most people in the Shire but sadly, there are particularly financially vulnerable people in our community for whom the decision to have a cup of coffee this week disappeared years ago.

“I have had more than one senior tell me about their decision-making process about whether to turn the airconditioner on in summer, the heater on in winter and about a hole in a roof which was fixed by investing in a bucket from the two buck shop.”

However, Shire chief executive Jonathan Throssell said CPI was not an appropriate inflator for local government rates and budgets.

“The basket used to calculate CPI does not include the main cost drivers associated with the services provided by a local government,” he said.

“CPI considers changes in the price of more than 100 items frequently purchased by households, such as fruit and vegetables, domestic and international holiday travel and tobacco for example.

“Councils do not buy fruit and vegetables, holiday travel or tobacco.

“The role of councils is to maintain roads and bridges, run community infrastructure such as libraries and parks and deliver important services such as waste disposal.

“A council basket of goods refers to the price of asphalt, building materials, labour costs and so on.

“These do not increase at the rate of the CPI basket.

“For example, local government must pay for electricity for street lighting, gas for shire buildings or water for parks and ovals however none of these services are limited to increases by CPI.”

Mr Throssell added the local government sector was increasingly tasked with the provision of services previously provided by the State Government, but had not received any additional funding.

“There has also been a reduction in grants to the sector such as the freeze in Financial Assistance Grants from the Commonwealth and a reduction in State Government support for local roads,” he said.

Mr Throssell said if council were to fix rates at the forecast CPI, the impact on forecast rates income would see a reduction of $16.4 million over the life of the Shire’s 10 year Long Term Final Plan.

However, Cr Martin said CPI was a good measure of the cost of living for a typical household.

“Recognising the gradual increase in the cost of living, we see that wages, pensions, allowances and most aspects of a typical household’s income are strongly correlated to CPI,” he said.

“One of the biggest issues facing household incomes is when the cost of living rises faster than income.

“For as far back as I can find through the Mundaring Shire annual reports, we have always had rate increases higher than CPI and in many cases, significantly higher, in my opinion, than CPI.

“If a cost is increasing at a faster rate than income, there is a point at which they will actually meet.

“Using the figures of a single senior receiving the Federal Government pension, which increases at CPI, versus rates which increase at a faster rate shows at some that point in time, the Department of Human Services might as well pay a senior’s pension, in its entirety, directly to the Shire.

“This is a ridiculous situation which, year by year, we continue to creep towards.”