Burnside Council proposes 14 per cent rate rise, the highest of all metropolitan councils

Rate rises are the order of the day across Adelaide as councils crunch their numbers. But one community is set to be hit far harder than most. See the list.

The Evans family moved into the area six months ago and didn't get any benefits of the previous rate freezes. Jen and husband Luke, with their children Rupert, 3, and August, 1. Picture: Brett Hartwig

An eastern suburbs council is proposing a staggering 14 per cent rate rise during a cost of living crisis, saying it must increase rates in order to break even and maintain assets.

Burnside Council has proposed the highest increase of any metropolitan council after four financial years of modest rate rises – twice at zero, then 3.5 and 6 per cent.

The 14 per cent rise would add $299 a year to the average residential rates bill, or about $25 a month, and would be followed by CPI rate increases over the next two financial years.

Chief executive Chris Cowley said there were two key reasons for the magnitude of the rise, when compared to other city councils which averaged rises of 6 per cent.

Burnside Council chief executive Chris Cowley. Picture: Supplied

These were a historic 6.7 per cent gap between past rate rises and CPI – which equated to about $3m passed on as savings to ratepayers – and a 6 per cent increase in the cost to maintain assets, also equating to $3m.

“The council has been raising it’s rates at levels below CPI for too many years … council did this in the best intentions to assist you (the ratepayer) with the many financial challenges experienced in the past,” Mr Cowley said in a 10-minute video.

“This trend cannot continue, as it’s not financially sustainable.

“The cost-of-living pressures impacting us now are absolutely unfortunate, but it’s the same pressures coming to bear on our service provision.”

Mr Cowley said it was a challenge to balance rates and its ability to deliver its 122 services to their current level and maintain an $890.9m asset base.

The proposed rate rise would allow it to break even with a modest $404,000 surplus within one year.

Council administration had also proposed an alternative three-year budget recovery model – a 9.8 per cent rise in 2024/25, about $209 extra a year, followed by rises of 4-7 per cent over the next two financial years.

However, councillors were divided and the presiding member – who filled in for a sick mayor – voted to consult the community on the 14 per cent rise.

“If this is too high, we need the community to hone in on how the council could maintain services or cut back, to achieve a goal of going lower than a 14 per cent increase,” Mr Cowley told The Advertiser.

Other proposed rate increases at the top end of the scale included Onkaparinga at 6.8 per cent, Playford at 6.5 per cent and Holdfast Bay 7.1 per cent.

The lowest proposed rise was Unley Council at 3.75 per cent.

Uniting Communities chief executive Simon Schrapel said council rates added to the list of pressures facing homeowners, with the impact being felt first-hand by the organisation.

“Alongside sticky interest rates and inflationary pressure, any increase to rates will undoubtedly add to the strain on South Australian households and families,” Mr Schrapel said.

“Presently, mortgage holders represent approximately 70 per cent of those reaching out to our financial counselling team – this is marked shift from those who have traditionally sought our support and it challenges the conventional ideas about who is struggling.”

Mr Schrapel said they were aware some families were making decisions between putting food on the table, keeping a roof over their heads or paying their bills.

Local Government Association president Dean Johnson said councils also faced cost increases and were catching up after deferring some ratepayer payments during the pandemic.

“Interest rates and CPI, along with huge cost increases for materials and labour and cost shifting from state and federal governments, continues to put pressure on council budgets,” Mr Johnson said.

“Many councils froze rates during the pandemic and deferred payments to help their communities through a time of unprecedented uncertainty and the knock-on effect is now being felt.”

Mr Johnson said to keep downward pressure on rates, the federal government must restore funding through its financial assistance grants, which had halved over the past 25 years meaning communities were missing out on billions of dollars.

“The balance of retaining key services, maintaining assets, while keeping rates as low as possible, is becoming increasingly difficult and more must be done at a federal level to alleviate the fiscal pain being felt,” he said.

Charles Sturt Council has proposed a 6.25 per cent rise – 2 per cent would be dedicated to its tree canopy project which aimed to double the council’s canopy to 25 per cent.

The council intended to plant 3000 new trees in 2024/25 and every year after until 2036/37.

Mitcham Council is consulting the community on two proposed rates of 6.75 per cent or 5.68 per cent, resulting in an average rise per property of $141 or $119, respectively.

The larger rise would allow for new services to address climate change and a new tree assistance fund to help residents care for large trees on their properties and tree maintenance.

The 5.68 per cent option would allow it to maintain existing services.

Adelaide City Council is consulting the community on a 5.9 per cent rise, committing 1.5 per cent of the income to upgrading Parklands buildings.

Norwood, St Peter’s Council has proposed an eight per cent rate rise through documents raised on Friday night. The risewill be discussed on Monday.