A report by Australian Services Union says rate capping by local councils found the jobs lost were related to "lost opportunities".

The West Wimmera Shire, Yarriambiack Shire and Hindmarsh Shire denied the finding that rate capping policy has cost thousands of jobs in the region.

West Wimmera chief executive David Bezuidenhout said rate capping is designed to ensure that council's revenue base is protected from increases in the cost of goods and services related to the sector.

"Local government labour costs are taken into account by the State Government when setting the rate cap. Council staffing is not contingent on any variation to the rate cap," he said.

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Yarriambiack Shire Council acting chief executive Tammy Smith said the council's current staffing levels are maintained with no plan of reducing.

"The value that our staff bring to the organisation cannot be underestimated," she said.

"Council prides itself on being an employer of choice, an equal opportunity employer and an organisation that supports their staff through career development.

"Rate capping reductions result in revenue losses and naturally results in cost shifting to deliver council services, however we do not see this impacting our current staffing levels."

Hindmarsh Shire chief executive officer Greg Wood said grants hold a stronger hold on staffing.

"We are not anticipating rate capping to affect job numbers at Hindmarsh in the near future.," he said.

"Rates are only one of our sources of revenue. Hindmarsh is more affected by the lack of certainty about future state and federal grants.

"Our capital works and road maintenance programs, and hence the staff required to deliver them, are heavily reliant on grants.

"With respect to rate capping, the main problem is that the cap does not relate to council's actual increase in costs which are much more aligned with construction and staffing costs and not the much broader CPI measure used for rate capping."

According to Australian Services Union data, the rate cap has a cost:

The spokesperson from Australian Services Union said these job losses were "further downstream".

They said the data looked at the loss of additional jobs such as for providing services to councils.

Other councils in the area were contacted for comment but did not respond before the deadline.

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