Higher rate cap applications

The average rate cap is set each financial year by the Minister for Local Government. Councils seeking to raise their average rates by more than the average rate cap must apply to us for a higher cap.

Our guidance for councils applying for a higher cap outlines in detail how we assess higher cap applications.

We ask councils to address a range of matters in their application, including:

• the proposed higher cap for each specified financial year (up to 4 years)
• the reasons why the council is seeking the higher cap
• how the views of ratepayers and the community have been considered in proposing the higher cap
• how the higher cap is an efficient use of council resources and represents value for money
• whether other funding options have been considered and why those options are not adequate
• the consistency of the assumptions and proposals in the application with the council's long-term strategy and financial management policies.

In approving a higher cap, we must be satisfied that the higher cap proposed is appropriate having regard to matters specified in the Local Government Act 1989.

We must also consider our legislative objectives:

• to promote the long-term interests of ratepayers and the community in relation to sustainable outcomes in the delivery of services and critical infrastructure
• to ensure a council’s financial capacity to perform its duties and functions and exercise its powers.

We will assess each application on its merits and determine the appropriateness of a higher cap, having regard to all relevant factors and the unique circumstances of the applicant council.