Sydney council ratepayers will fork out at least an above-inflation 2.3 per cent more for their council rates, the state’s independent pricing regulator announced on Tuesday.
The Independent Pricing and Regulatory Tribunal has been setting a “peg” for council rates for seven years using a formula designed to reflect to cost of providing government services.
“The Local Government Cost Index increased by 2.3 per cent in the year to September 2017,” IPART Chair Dr Boxall said.
But councils, who have long protested that they are being forced to do more with less and argued the state government has created a perverse incentive to find other, legal ways of revenue raising (such as levying fines), welcomed this year’s decision as an improvement on last year’s hike.
“It sure beats the 1.5 [per cent] we got last year,” said Keith Rhoades, head of the Local Government Association of NSW.
But he said councils should be given more freedom to raise revenue because they were being burdened with significant infrastructure responsibility. “They’re looking at a $74 billion backlog in maintenance but their hands are absolutely tied,” he said.
Mr Rhoades said councils were under increasing pressure because of rising gas and electricity bills. Sutherland Shire Council’s gas bill more than doubled this year.
Councils may apply for variations that allow them to increase rates by figures that have been as high as 10 per cent in recent years. But they must apply for the right to do so through a process of demonstrating need for the increase, including community surveys.
“If councils want to increase their revenue by more than the rate peg they will need to consult with their communities,” Dr Boxall said.
On a non-weighted average of $775 for annual for rates in all NSW councils, the increase amounts to only about $20.
But many metropolitan councils have much higher bills: Mosman’s average rate bill exceeds $1200, according to the Office of Local Government.
Councils will go through the process of applying for ‘Special Rate Variations’ before the year’s end, with decisions to be made on increases approved by IPART announced in May.
The consumer price index is currently at 1.8 per cent.