local government amendment (fair go rates) act 2015file/15-065a.docx · web viewocpc-vic, word...

Local Government Amendment (Fair Go Rates) Act 2015

No. 65 of 2015

TABLE OF PROVISIONSSection Page

Part 1—Preliminary 1

1 Purpose 12 Commencement 2

Part 2—Amendments to the Local Government Act 1989 3

3 Definitions 34 Strategic Resource Plan 45 Council must prepare a budget 46 Public notice 47 Adoption of budget or revised budget 58 New Part 8A substituted 59 Suspension of Councillors 12

Part 3—Amendments to the Essential Services Commission Act 2001 13

10 Definitions 1311 Functions of the Commission 1312 New section 10E inserted 13

Part 4—Repeal of amending Act 15

13 Repeal of amending Act 15═══════════════

Endnotes 16

1 General information 16

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Local Government Amendment(Fair Go Rates) Act 2015†

No. 65 of 2015

[Assented to 1 December 2015]

The Parliament of Victoria enacts:

Part 1—Preliminary1 Purpose

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.

Victoria

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2 Commencement

This Act comes into operation on the day after the day on which it receives the Royal Assent.

Section Page

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Part 2—Amendments to the Local Government Act 1989

3 Definitions

(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;

Part 4—Repeal of amending Act

Local Government Amendment (Fair Go Rates) Act 2015No. 65 of 2015

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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".

4 Strategic 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".

5 Council 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.".

6 Public notice

After section 129(4) of the Local Government Act 1989 insert—

"(5) In this section, proposed budget includes—



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(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.".

7 Adoption 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".

8 New Part 8A substituted

For Part 8A of the Local Government Act 1989 substitute—

"Part 8A—Rate caps185A Purposes 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.

185B Base average rate

The base average rate, in relation to a Council, means the rate calculated according to the following formula—



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where—

BAR is the base average rate; and

Rb is 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

L is 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.

185C Capped average rate

The capped average rate, in relation to a Council, means the rate calculated according to the following formula—

where—

CAR is the capped average rate; and

Rc is 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



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L is 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.

185D Minister 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).



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(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.

185E Council 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



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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;



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(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.



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185F Councils 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.

185G Review

(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



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that further reviews are completed periodically every 4 years after the date on which a review is completed under subsection (1).".

9 Suspension 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.".



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Part 3—Amendments to the Essential Services Commission Act 2001

10 Definitions

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;".

11 Functions 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;".

12 New 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



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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.".



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Part 4—Repeal of amending Act13 Repeal 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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Endnotes1 General information

See www.legislation.vic.gov.au for Victorian Bills, Acts and current authorised versions of legislation and up-to-date legislative information.

Endnotes


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http://www.legislation.vic.gov.au/

† 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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