Real Estate Concept, interest rates, mortgage, generic
Real Estate Concept, interest rates, mortgage, generic

Councils given chance to increase rates again

THE Independent Pricing and Regulatory Tribunal (IPART) has set the 2021-22 rate peg for NSW councils at 2.0 per cent, allowing councils to cover election costs.

The new rate peg gives councils the opportunity to increase the revenue they can collect from rates by a maximum of 2.0 per cent in 2021-22.

Tribunal Member Deborah Cope said that in setting the rate peg for 2021-22, IPART has recognised that councils face higher costs for their 2021 local government elections.

“We have included an adjustment of 0.2 per cent for election costs based on the expected costs for the average council in NSW,” Ms Cope said.

>>>SEE MORE: Why some ratepayers are seeing hike in their rates this year

“This allows councils to collect additional revenue in 2021-22 to meet the costs of the 2021 local government elections.

“The adjustment will be reversed through the 2022-23 rate peg, to ensure that ratepayers are not overcharged in subsequent, non-election years.”

IPART’s rate peg is based on the annual change in the Local Government Cost Index (LGCI), which measures the average costs faced by NSW councils.

The rate peg reflects moderate price inflation over the previous year for most cost categories.

“The rate peg for 2021-22 is lower than recent years, which is a positive outcome for NSW ratepayers,” Ms Cope said.

The rate peg represents the maximum percentage amount by which a council may increase its general income.

>>>SEE MORE: This council’s rates have risen by 63% over nine years

Ballina Shire Council general manager Paul Hickey said the council will most likely stick to the IPART recommendation.

“Council’s long term financial plan is based on applying the rate peg each year, and there are no plans to apply for a separate rate peg,” Mr Hickey said.

Meanwhile, Richmond Valley Council had a previously arranged plan with IPART four-year special rate variation of 5.5 per cent per annum, which was introduced at the start of the 2019-2020 financial year until the end of 2022-2023.

Lismore City, Byron Shire and Tweed Shire Councils have also been contacted for comment on whether they plan to implement the 2021-22 rate peg.

Councils have discretion to increase general income by the rate peg, less than the rate peg, or not at all.

The rate peg applies to each council’s general income in total, not to individual ratepayers’ rates.


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