Adelaide mayors increase fight against State Government plan to cap rates

A STATE Government plan to cap council rates could lead to increased bills in the short term and in the longer term decreased services, two eastern-suburbs mayors say.

Norwood, Payneham & St Peters mayor Robert Brial. Picture: Sam Wundke

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A STATE Government plan to cap council rates could lead to increased bills in the short term and in the longer term decreased services, two eastern-suburbs mayors say.

Norwood, Payneham & St Peters Mayor Robert Bria said capping rates, a key pledge of the new Liberal Government, would encourage councils to raise rates to the maximum amount allowed.

“Every time you introduce a cap, the instinctive thing to do is to go to the cap as there is no incentive to go lower,” Mr Bria said. “If the cap is 2.5 per cent and their rate (rise) is 1.7 per cent, there is nothing from stopping them from lifting it to that set rate and raking in some extra dough.”

In recent years, council rate rises across Adelaide have generally sat at under 3 per cent. However, within the past decade, rate rises have been as high as 9 per cent.

Mr Bria said, in the long term, some councils would be forced to reduce services.

“Inevitably, the time will come when all councils will be faced with cutting services and cancelling projects because they won’t be able to pay for them.”

Burnside Mayor David Parkin agreed that rates bills could increase in the short term as councils opted to raise rates to the cap to safeguard their budgets.

“Because otherwise we’re always getting ourselves behind,” Mr Parkin said.

“The short-term likelihood is that you’d have to always come to a compromise between cutting services and putting off capital.”

Burnside increased its rates by 2.3 per cent this financial year, after rate rises of 0.9 per cent in 2016/17 and 2.9 per cent in 2015/16.

NP&SP Council increased its rates by 2.65 per cent this year, after rises of 1.85 per cent in 2016/17 and 1.4 per cent in 2015/16.

The inflation rate was 1.7 per cent in 2015, 1.5 per cent in 2016 and 1.9 per cent in 2017, according to the Reserve Bank.

Labor and SA Best’s Upper House members have indicated they are unlikely to support rate cap legislation.