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Call for removal of rate pegging

Growing pains: The new rate cap of 2.8 per cent is expected to make it harder for council’s like Coffs Harbour to meet their growing infrastructure and service needs.
Growing pains: The new rate cap of 2.8 per cent is expected to make it harder for council’s like Coffs Harbour to meet their growing infrastructure and service needs.

COFFS Harbour’s mayor is leading a call for the removal of rate pegging, despite a new method of determining the rate cap limit.

Cr Keith Rhoades, who is also the President of the Local Government Association, said a new rate peg of 2.8 per cent was announced last Friday by the Independent Pricing and Regulatory Tribunal (IPART).

“For many years, the associations have been calling for the rate cap figure to be based on a Local Government index and determined by an independent body such as IPART, so we’re happy to finally see it happen,” Cr Rhoades said.

“This new system provides much more transparency and accountability, and produces a better outcome for local government in the long run.

“Despite this, the 2.8 per cent rate cap still falls well short of the real cost increases facing councils, making it difficult for councils to meet the growing service and infrastructure needs of local communities.”

The President of the Shires Association, Cr Bruce Miller, said councils were grateful that the announcement has been made much earlier than previous years as it gives them more time to work on their management plans and prepare their submissions for rate variations.

“But the reality is the rate cap is simply not enough to cover our escalating expenses let alone address the $6 billion infrastructure renewal backlog we currently face,” Cr Miller said.

“Yes, the figure is in line with the current CPI but councils already have to deal with an inadequate share of taxation and a bill that totals $440 million every year for costs shifted onto us by other levels of government.

“With the state government election looming there has never been a better time to get rid of rate pegging all together, and the associations will be lobbying hard to get the major political parties on board.

“Hopefully, as we begin to implement the Integrated Planning and Reporting guidelines, councils can prove that they’re capable of making well-informed decisions – such as determining their own level of rates.”

Cr Rhoades said NSW is the only state in Australia that is constrained by rate pegging.

“I encourage councils to apply for special rate variations, particularly for infrastructure maintenance and improvement projects, and we’ll be waiting to see how these will be determined under the new system,” he said.



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