Victorian councils will be guided by a 2.5 per cent rate cap for 2019-20.

Victorian councils will be guided by a 2.5 per cent rate cap for 2019-20.

Minister for Local Government Adam Somyurek handed down the new cap last week, which is guided by the Consumer Price Index (CPI) for 2019-20.

The Fair Go Rates system was implemented in the 2016-17 financial year and is helping encourage practical, well informed financial management in local government.

In the decade before the introduction of Fair Go Rates, council rates increased by an average of 6 per cent per annum.

Since then, the rate cap has been in line with CPI – 2.5 per cent in 16/17, 2.0 per cent in 17/18 and 2.25 per cent in 18/19.

Councils seeking to exceed the rate cap can apply to the Essential Service Commission for consideration.

For more information on Fair Go Rates, including the advice of the ESC, visit delwp.vic.gov.au/fairgorates

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