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Tribunal lifts rates cap

Thursday, 13th September, 2018

By Emily Roberts

Councils will be able to increase the revenue they can collect from rates by a maximum of 2.7 per cent in 2019-20.

This was announced yesterday by the Independent Pricing and Regulatory Tribunal (IPART) and is higher than it has been for a number of years.

The rate peg is determined by IPART each year and it sets the maximum increase to general income NSW councils can collect. 

The main component of general income is rates revenue. Councils have discretion to increase general income up to the rate peg, by less than the rate peg or not at all.

IPART Chair, Dr Peter Boxall, said next year’s rate peg is higher than than last two years (2.3 per cent in 2018-19 and 1.5% in 2017-18), primarily due to increases in labour and energy costs and higher construction costs for roads, drains, footpaths, kerbing and bridges.

“Since the rate peg applies to general income in total, and not to individual rate assessments, it is up to each council to determine whether to apply the allowed increase in full and how to allocate the increase between households, businesses and other ratepayer categories,” Dr Boxall said.

“Similarly, if councils want to increase their revenue by more than the rate peg they will need to consult with their communities before applying to IPART for a special variation.”

Thirteen NSW Councils asked for a special variation during the most recent financial year.

Broken Hill City Council had adopted the minimum rate rise with Chief Financial Officer Jay Nankivell saying they remained committed to not going above the rate peg.

A Council spokesman said this week that it will review the latest increase during their budget process next year.

“Council will consider the rate peg as part of our next budget process in 2019,” he said.

Councils wishing to apply for a special rate variation must notify IPART by 30 November this year.

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