SA council rates cap plan legislation, plan for state watchdog to probe spending to be revealed

SOUTH Australia’s first council rate cap will be decided by the end of the year, and a state watchdog given power to probe spending, under legislation to be revealed on Tuesday.

SOUTH Australia’s first council rate cap will be decided by the end of the year, and a state watchdog given power to probe spending, under legislation to be revealed on Tuesday.

Local Government Minister Stephan Knoll will move to introduce the reform in State Parliament, which he says will save ratepayers tens of millions of dollars per year – and also includes a carrot to win over doubtful councils.

The Advertiser can reveal that the selected model will let local government raise extra revenue to cover the cost of new developments, a move the Government hopes will quell councils’ fears and providing stimulus for construction jobs and population growth.

Local Government Minister Stephan Knoll. Picture: AAP / Morgan Sette

Mr Knoll insisted the final plan was “workable” and councils that have ferociously opposed the idea will realise capping is not “the bogey man” after having examined the detail.

The Essential Services Commission of SA, which already has oversight of utilities and water bill rises, will decide the maximum allowed council rate increase by the end of December this year.

Councils will have until the end of March to seek special circumstances exemptions from the limit, before the cap comes into full force from July 1 next year.

Mr Knoll said skyrocketing council rates, which have increased three times faster than inflation over the past decade, were a burden on households that must be lifted.

He said ESCOSA would examine costs facing councils and independently set a fair but frugal limit.

“This is something that, once it is in place, will change the discussion to be about how we can deliver more with what we’ve got rather than just continually going back to ratepayers for more and more money,” Mr Knoll said.

“We want to make sure that there is rigour on councils’ behalf to prove to ESCOSA that they need this extra cash, and that their communities support extra projects or increased services that are going to be delivered.

“We want to deliver a more efficient and effective local government sector that ultimately will flow through and have more money in the pockets of households, not in council coffers.”

In a key tweak, the revenue councils could collect would rise if they added new properties.

This is aimed at overcoming fears of infrastructure and service shortfalls from a cap.

Mr Knoll said ESCOSA will also be able to “encourage councils to find efficiencies through different ways of doing things” after having closely examined their balance sheets.

However, the State Government faces a significant political obstacle as it seeks to deliver the controversial election pledge.

Key crossbenchers opposed the cap plan during the state election campaign. Labor blocked rate capping while in power, but is now considering its position.

Mr Knoll said ESCOSA had already started work on the cap plan to ensure it could swiftly implement the policy once the required legislation was approved by Parliament.

Mr Knoll said the Local Government Association, which ran a campaign against the policy before the election, was now “working cooperatively” to deliver “the best scheme possible”.

“I do look forward to helping local government to realise that this isn’t the bogey man and that this scheme is going to be the best in the country,” he said.

In April, the Government released analysis showing council rates had risen by 67 per cent over 10 years. Inflation was 26 per cent over the period, and state taxes rose by 24 per cent.

Mr Knoll said he hoped rival parties and councils would back a policy the public wanted.

Council elections will be held in November this year.

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