The selected New South Wales councils approved for an increase in rates by the Independent Pricing and Regulatory Tribunal (IPART) have been supported by the Local Government NSW (LGNSW) organisation.
86 New South Wales councils were approved to increase rates by 2.5 per cent, against an inflation rate expected to reach 7 per cent by December 2022.
LGNSW President, Darriea Turley, said the special rate variations announced by the IPART acknowledged the dire financial situation created by its initial decision to cap rate rises at 0.7 per cent.
The 0.7 per cent cap – the lowest baseline rate cap in more than two decades – was handed down despite surging inflation, soaring fuel and commodity prices, and the need to repair extensive damage caused by the Black Summer bushfires and the recent floods.
“It is important to recognise that councils would have been held to this historic low rate cap without the intervention and insistence of Local Government Minister Wendy Tuckerman” Cr Turley said.
“Without this, many councils would have been forced to choose between cuts to jobs or roads maintenance, parks, libraries and other community infrastructure and services.
Cr Turley said that whilst the announcement was strongly welcomed there was a deep concern that “such an anomaly can be produced by IPART in the first place”.
Cr Turley said the special rate variations announced were still extremely modest, coming in at around half the current inflation rate and one third of the Reserve Bank’s predictions of 7 per cent inflation by December.
“Councils are the closest level of government to the community, and we know firsthand that individuals and local businesses in our communities are doing it tough,” Cr Turley said.
“That’s the very reason why we all agreed to share that burden and keep rate rises as low as possible.
“Responsible budgeting meant we were, and are prepared to share, the burden on our communities – but that burden should not include the prospect of cutting jobs, services and spending on infrastructure critical for our local economies.
“The simple fact that more than three-quarters of the state’s councils were forced to seek a special rate variation shows the methodology used by the Tribunal to calculate the rate cap is irretrievably broken.
“It is clearly no longer fit for purpose, so I would urge the State Government and the IPART to make sure the upcoming review comes back with a system that works.”
IPART has confirmed it will review its own rate cap methodology following a reference from the New South Wales State Government.
“The rate variation approvals mean that councils can get back to the core business of delivering the services and critical infrastructure communities and economies need,” Cr Turley said.
“IPART needs to do the same, and that means reviewing and replacing the current defective methodology with something better.”
For a full list of councils approved for a special rate variation visit here.