Rate cap hits councils' budgets

NORTHERN Rivers councils face increasingly tight budgets, despite the NSW Government handing control of council rate caps to an independent body, mayors have warned.

Mayors from across the region yesterday said they were disappointed with the 2.8 per cent cap on rate rises announced by the Independent Pricing and Regulatory Tribunal, saying it did not come close to matching costs.

The tribunal announced the cap saying council costs had increased by 3 per cent in the year to September, but it was factoring in a ‘productivity adjustment’ of 0.2 per cent.

Northern Rivers Regional Organisation of Councils president and Ballina Shire mayor Phillip Silver said he was pleased politicians no longer decided limits on council rate rises.

However, he questioned the productivity adjustment, saying he did not know where councils could cut costs.

“I think local government is already as skinny as it can get,” he said.

Cr Silver pointed out metropolitan councils, whose figures would have influenced the 2.8pc figure, had lower costs than regional councils.

“Kuringai Council doesn’t have to run a waste water treatment plan or a garbage tip or do road construction,” he said.

Byron Shire mayor Jan Barham said the tribunal should consider doing separate calculations for metropolitan and regional councils.

Cr Barham said the 2.8pc increase announced by the tribunal would push councils closer to structural deficits, where their minimum costs were greater than their incomes.

Kyogle mayor Ernie Bennett echoed that fear, saying the 2.8pc increase would not even keep up with the growing superannuation fees his council had to pay its workers.

Tribunal chief executive Jim Cox said the tribunal considered doing a separate calculation for regional councils. However, it found they would be even worse off under that system because construction costs had not increased as much as wage costs – which tended to be higher for metropolitan councils.

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