Australian Local Government Association warns council rate hikes put Labor, Coalition cost-of-living tax cuts at risk

Anthony Albanese and Peter Dutton’s promises to provide cost of living relief threaten to be wiped out as councils plan to raise rates by up to 87 per cent due to a lack of government funding.

Anthony Albanese and Peter Dutton’s promises to provide cost of living relief to the public threatens to be wiped out after the election, with councils across the country planning to increase rates by up to 87 per cent due to a lack of government funding.

North Sydney, Northern Beaches, Upper Hunter, Gunnedah and Cowra Shire Council in NSW have already lodged requests to hike ratepayer fees by 33-87 per cent in the next two years.

For North Sydney locals, the staggered 87 per cent increase would double rates from $715 to $1548 per year by mid-2026, or from just under $2 to $4.20 per week, leaving only $0.80 of spare change left over from Labor’s major election promise – a $5 weekly tax cut.

Indigo Shire and Hepburn Shire Council in Victoria have requested to increase rates by up to 10 per cent, while more than half of Queensland councils have been deemed financially unsustainable and will have to increase rates unless funding is secured, which if enacted, would cost ratepayers hundreds of dollars more each year.

The Australian Local Government Association (ALGA), speaking on behalf of 573 councils across the country, said if rates did rise nationwide – it would cancel out the potential savings residents would make under either a Labor or Coalition government, and their cost-of-living relief measures.

Residents line up to protest the proposed North Sydney Council rate rise. Picture: Jonathan Ng

ALGA claims councils are raising rates because they’re not receiving enough government funds, and because more ratepayers money is flowing to state and federal projects.

The association has called for Canberra to increase financial support for local councils by doubling the annual Financial Assistance Grant scheme from $3.2bn to $6.7bn.

Murray River Council Mayor John Harvie said the council will have to raise rates by 75 to 100 per cent if the government does not increase funding for local councils.

Grants are the main source of money for councils besides rates, but ALGA claims that revenue has been slashed over the last 30 years from one per cent to 0.55 per cent of general tax revenue.

Murray River Council received $11m this year, but Mayor John Harvie said this cannot cover inflation or the costs to maintain road networks, infrastructure and services, which has pushed the council into $10 million dollars’ worth of debt.

Mr Harvie warned most regional and rural councils are on the brink of financial collapse as they have to pay for their own water and waste systems.

This is not the case for councils in the city, who benefit from state utilities such as Sydney Water and Melbourne Water.

Council plans to raise could make a serious dent in Labor and the Coalition’s centrepiece election policies.

“We have recently been forced to close down a sewage treatment farm due a lack of funds to upgrade and repair the facility to meet safety standards,” Mr Harvie said.

“There are only two ways a rural council like Murray River can raise revenue, that is through these grants or through rates, and if the federal government continues to ignore our pleas (to increase funding) then councils will have no choice but to raise rates by between 75 per cent and 100 per cent in the next year to keep the doors open.”

In other states, councils are taking different measures to shake ratepayers for additional funds.

For the first time in six years, two Victorian councils have requested the Essential Services Commissioner raise their fees above the three per cent cap on council rate hikes, with Hepburn Shire and Indigo Shire planning increases of 10 per cent and 7.5 per cent.

Labor and the Coalition have been approached for comment.

Originally published as Australian Local Government Association warns council rate hikes put Labor, Coalition cost-of-living tax cuts at risk