Council rate capping would have saved SA households and businesses $19m in past year if implemented, says minister

A second attempt at capping council rates has been launched by the State Government, which says households and businesses have already been overcharged $19 million in the past year.

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Council rate capping would have saved SA households and businesses a total of $19 million in the past year if in effect, according to analysis produced by the State Government in its second bid to pass the cost of living plan in Parliament.

Local Government Minister Stephan Knoll has released modelling to The Advertiser which indicates councils reaped $18.7 million more in rates during the 2019-20 financial year than if rises were kept to the inflation level they faced.

The claim is hotly contested by the Local Government Association, which says Mr Knoll’s analysis is “deceptive” and does not examine the plan rejected by Parliament.

Mr Knoll said the Opposition, which has released its own plans for more oversight of local government, was blocking lower council rates.

“If Labor let these massive rate hikes continue, it will add hundreds of dollars to household and business council rate bills,” Mr Knoll said.

The Government’s analysis compares the 3.28 per cent increase in rates received by SA councils to the local government price index in March 2019, which was 2.1 per cent.

The LGPI is similar to the economy-wide measure of inflation, but examines the rising cost of things councils buy like machinery and bitumen.

When the first plan to cap rates was mooted, the Essential Services Commission of SA indicated it would have been a maximum 2.9 per cent rise.

Stephan Knoll’s second attempt at reform is currently before Parliament.

The first version of rate capping was defeated by Labor and the crossbench, amid claims it was a blunt tool. Mr Knoll’s second attempt at reform is currently before Parliament, and requires each council submit their budgets for independent vetting. Rate caps could then be imposed by the Minister, with savings for households and businesses, if there were evidence of waste.

Labor councils spokesman Tony Piccolo said the Opposition was considering its position on the latest plan, and consulting. “Labor is committed to ridding local government of waste, rorts and unjustified executive perks,” he said. “We are keeping an open mind on how to achieve these outcomes.”

LGA president Sam Telfer said it was “yet another attempt from the State Government to deflect attention from its own fees and charges”.

He said the Government was being “deceptive” with its analysis and many councils had kept their rates far lower than the proposed cap.

“This year council rate increases are generally less than increases in State Government fees and charges, with many councils looking at freezing their rates,” Mr Telfer said.

“Last year the State Government increased their Solid Waste Levy by 40 per cent.

“Had they capped their bin tax it would have saved ratepayers $8.5 million last year.”