Untitled document
Local Government Amendment (Fair Go Rates) Act 2015
No. 65 of 2015
table of provisions
Section Page
Part 1—Preliminary
1Purpose
2Commencement
Part 2—Amendments to the Local Government Act 1989
3Definitions
4Strategic Resource Plan
5Council must prepare a budget
6Public notice
7Adoption of budget or revised budget
8New Part 8A substituted
9Suspension of Councillors
Part 3—Amendments to the Essential Services Commission Act 2001
10Definitions
11Functions of the Commission
12New section 10E inserted
Part 4—Repeal of amending Act
13Repeal of amending Act
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Endnotes
1 General information
Local Government Amendment
(Fair Go Rates) Act 2015
No. 65 of 2015
[Assented to 1 December 2015]
The Parliament of Victoria enacts:
Part 1—Preliminary
1Purpose
The purpose of this Act is to amend the Local Government Act 1989 and the Essential Services Commission Act 2001 to provide for a mechanism to set a cap on the increases in rate revenue that can be levied by a Council in a financial year and to make consequential amendments.
2Commencement
This Act comes into operation on the day after the day on which it receives the Royal Assent.
Part 2—Amendments to the Local Government Act 1989
3Definitions
(1)In section 3(1) of the Local Government Act 1989 insert the following definitions—
"average rate cap means an amount expressed as a percentage amount, based on the change to CPI over the financial year to which the cap relates, plus or minus any adjustment;
base average rate has the meaning given by section 185B;
base year means the financial year preceding the capped year;
capped average rate has the meaning given by section 185C;
capped year means the financial year specified in a general Order;
CPI means the forecast Melbourne consumer price index, as published in the budget update prepared under the Financial Management Act 1994;
Essential Services Commission has the same meaning as Commission has in the Essential Services Commission Act 2001;
general Order means an Order made by the Minister under section 185D;
higher cap means an amount expressed as the average rate cap specified in a general Order plus an additional percentage amount in respect of that financial year;
special Order means an Order made by the Essential Services Commission under section 185E;".
(2)In section 3(1) of the Local Government Act 1989, in the definition of rateable property, after "Part 3" insert "or Part 8A".
4Strategic Resource Plan
In section 126(3)(b) of the Local Government Act 1989, after "30 June each year" insert ", or such other date fixed by the Minister by notice published in the Government Gazette".
5Council must prepare a budget
After section 127(3) of the Local Government Act 1989 insert—
"(4)The Council must ensure that, if applicable, the budget also contains a statement—
(a)that the Council intends to apply for a special Order to increase the Council's average rate cap for the financial year under section 185E; or
(b)that the Council has made an application to the Essential Services Commission for a special Order under section 185E and is waiting for the outcome of the application; or
(c)that a special Order has been made in respect of the Council and a higher cap applies for the financial year.".
6Public notice
After section 129(4) of the Local Government Act 1989 insert—
"(5)In this section, proposed budget includes—
(a)a budget that is prepared on the basis of the application of an average rate cap fixed by general Order or a proposed higher cap subject to an application under section 185E; and
(b)a budget that is prepared on the basis of both the application of an average rate cap fixed by general Order and a proposed higher cap subject to an application under section 185E.".
7Adoption of budget or revised budget
In section 130(3) of the Local Government Act 1989, after "30 June each year" insert ", or such other date fixed by the Minister by notice published in the Government Gazette".
8New Part 8A substituted
For Part 8A of the Local Government Act 1989 substitute—
"Part 8A—Rate caps
185APurposes of this Part
The purposes of this Part are—
(a)to promote the long term interests of ratepayers and the community in relation to sustainable outcomes in the delivery of services and critical infrastructure; and
(b)to ensure that a Council has the financial capacity to perform its duties and functions and exercise its powers.
185BBase average rate
The base average rate, in relation to a Council, means the rate calculated according to the following formula—
where—
BARis the base average rate; and
Rbis the total annualised revenue leviable from general rates, municipal charges and any other prescribed rates or charges on rateable properties within the Council's municipal district as at 30 June in the base year; and
Lis the number of rateable properties within the Council's municipal district as at 30 June in the base year.
Note
The total annualised revenue leviable in the base year includes revenue that is budgeted as at 1 July of the base year and the full year effect of annualised supplementary rates.
185CCapped average rate
The capped average rate, in relation to a Council, means the rate calculated according to the following formula—
where—
CARis the capped average rate; and
Rcis the total annualised revenue leviable from general rates, municipal charges and any other prescribed rates or charges on rateable properties within the Council's municipal district as at 1 July in the capped year; and
Lis the number of rateable properties within the Council's municipal district as at 1 July in the capped year.
Note
The total annualised revenue leviable in the capped year is the revenue that is budgeted as at 1 July of the capped year.
185DMinister may set average rate cap by general Order
(1)The Minister may by general Order published in the Government Gazette direct a Council that the capped average rate in respect of a specified financial year must not exceed the base average rate by more than the average rate cap specified in the general Order.
(2)A general Order made under subsection (1) may be directed to—
(a)all Councils; or
(b)a class of Councils; or
(c)a specified Council.
(3)Before making a general Order, the Minister must—
(a)request advice from the Essential Services Commission for the purposes of adjustment in setting the average rate cap; and
(b)have regard to any advice received from the Essential Services Commission as requested under paragraph (a).
(4)The Essential Services Commission must provide advice to the Minister in accordance with a request made under subsection (3)(a).
(5)A general Order does not have effect in respect of a capped year unless it is published in the Government Gazette—
(a)on or before 31 December in the financial year before the capped year; or
(b)on or before such other date fixed by the Minister by notice published in the Government Gazette in the financial year before the capped year.
185ECouncil may apply for higher cap
(1)A Council that is the subject of a general Order may apply to the Essential Services Commission for a special Order specifying a higher cap for one or more specified financial years (up to a maximum of 4 years).
(2)An application under this section must be made—
(a)by 31 March before the first capped year to which the application relates; or
(b)by such other date fixed by the Minister by notice published in the Government Gazette.
(3)An application under this section must be accompanied by the prescribed fee (if any) and must specify—
(a)a proposed higher cap for each specified financial year; and
(b)the reasons for which the Council seeks the higher cap; and
(c)how the views of ratepayers and the community have been taken into account in proposing the higher cap; and
(d)how the higher cap is an efficient use of Council resources and represents value for money; and
(e)whether consideration has been given to reprioritising proposed expenditures and alternative funding options and why those options are not adequate; and
(f)that the assumptions and proposals in the application are consistent with the Council's long term strategy and financial management policies set out in the Council's planning documents and annual budget.
(4)The Essential Services Commission may make guidelines specifying any further matters in respect of applications for a special Order.
(5)The Essential Services Commission may do any or all of the following in relation to a Council making an application under this section—
(a)direct the Council to submit the application in a manner and form determined by the Essential Services Commission;
(b)direct the Council to provide the Essential Services Commission with any information that the Commission considers would be relevant to the application;
(c)provide any further advice or guidance to the Council in relation to the application.
(6)The Essential Services Commission may make a special Order if satisfied that the higher cap proposed by the Council or another higher cap set by the Commission (but not higher than the higher cap proposed by the Council) is appropriate, having regard to—
(a)the matters specified in subsection (3); and
(b)whether the directions given under subsection (5) (if any) have been complied with; and
(c)the Council's record of compliance with any previous general Order and any special Order.
(7)If the Essential Services Commission makes a special Order in respect of a Council, the applicable cap on rates for the year or years specified in the special Order is the higher cap set out in the special Order.
(8)If the Essential Services Commission makes a special Order under this section, the Commission must by notice published in the Government Gazette specify—
(a)that a special Order has been made under this section; and
(b)the Council to which the special Order applies; and
(c)the higher cap; and
(d)each financial year to which the higher cap applies to the Council.
185FCouncils must comply with a general Order and any special Order that applies
(1)A Council must comply with a general Order and any special Order that applies to it.
(2)If a Council fails to comply with the general Order and any special Order that applies to it, the failure does not affect the validity of any rates or charges levied in respect of the financial year in respect of which the failure occurred.
(3)Despite subsection (2), the Minister may by Order published in the Government Gazette declare that a Council's rates or charges levied in respect of a financial year, or part of the Council's rates or charges levied in respect of that financial year, are invalid for all purposes if the Minister is satisfied that the Council has repeatedly and substantially failed to comply with a general Order and any special Order.
185GReview
(1)The Minister administering this Act and the Minister administering the Essential Services Commission Act 2001 must ensure that a review of this Part is completed by 31 December 2021.
(2)The purpose of the review is to determine—
(a)whether the mechanism for setting a cap on rates set out in this Part is still appropriate; and
(b)whether this Part is effective or needs to be amended.
(3)The Minister administering this Act and the Minister administering the Essential Services Commission Act 2001 must ensure that further reviews are completed periodically every 4 years after the date on which a review is completed under subsection (1).".
9Suspension of Councillors
In section 219(1) of the Local Government Act 1989—
(a)in paragraph (b), for "respect." substitute "respect; or";
(b)after paragraph (b) insert—
"(c)that the Council has repeatedly and substantially failed to comply with a general Order and any special Order.".
Part 3—Amendments to the Essential Services Commission Act 2001
10Definitions
In section 3 of the Essential Services Commission Act 2001 insert the following definition—
"Council has the same meaning as in the Local Government Act 1989;".
11Functions of the Commission
After section 10(k) of the Essential Services Commission Act 2001 insert—
"(ka)to perform the functions conferred on the Commission by Part 8A of the Local Government Act 1989;".
12New section 10E inserted
After section 10D of the Essential Services Commission Act 2001 insert—
"10E Commission's functions in relation to Councils
(1)The Commission has the following functions in relation to Councils—
(a)monitoring and reviewing Councils' compliance with the caps set under Part 8A of the Local Government Act 1989;
(b)assessing the outcomes as a result of general Orders and special Orders made under Part 8A of the Local Government Act 1989;
(c)identifying trends across the local government sector arising from the caps, and any other impacts of the caps on the sector.
(2)The Commission must prepare an annual report on Councils' compliance with the caps.
(3)The Commission must prepare a biennial report containing—
(a)an assessment of outcomes as a result of general Orders and special Orders made under Part 8A of the Local Government Act 1989; and
(b)the identification of any trends across the local government sector arising from the caps, and of any other impacts of the caps on the sector.
(4)A report under subsection (2) or (3) must be published on the Commission's internet site.
(5)The Commission must publish notice of the publication of a report under subsection (2) or (3) in the Government Gazette and in a newspaper generally circulating in Victoria as soon as is practicable after the report is published.
(6)A notice under subsection (5) must specify a place where copies of the report are available for inspection.
(7)In performing its functions and exercising its powers under this section and the Local Government Act 1989, the objective of the Commission is to promote the purposes of Part 8A of the Local Government Act 1989.".
Part 4—Repeal of amending Act
13Repeal of amending Act
This Act is repealed on the first anniversary of its commencement.
Note
The repeal of this Act does not affect the continuing operation of the amendments made by it (see section 15(1) of the Interpretation of Legislation Act 1984).
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Endnotes
1 General information
See for Victorian Bills, Acts and current authorised versions of legislation and up-to-date legislative information.
Minister's second reading speech—
Legislative Assembly: 21 October 2015
Legislative Council: 12 November 2015
The long title for the Bill for this Act was "A Bill for an Act to amend the Local Government Act 1989 and the Essential Services Commission Act 2001 to provide for a mechanism to set a cap on the increases in rate revenue that can be levied by a Council in a financial year, to make consequential amendments and for other purposes."
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