SA council rates rise at almost three times rate of inflation, figures show

COUNCIL rates have skyrocketed at almost three times the pace of inflation in the past decade, according to State Government analysis it says strengthens the case for capping.

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COUNCIL rates have skyrocketed at almost three times the pace of inflation over the past decade, according to State Government analysis it says strengthens the case for capping.

Local Government Minister Stephan Knoll said the figures showed some councils had been “gouging” their ratepayers and needed oversight that forced them to cut out wasteful spending.

The data also shows a wide variation between different council areas, as Gawler’s rate revenue more than doubled over a period but Port Adelaide Enfield’s lifted by just 41 per cent.

The State Government plans to put legislation enabling the rate cap into Parliament by mid-year, to meet a campaign promise of having it in motion within the first 100 days.

However, it faces strident opposition from the Local Government Association and is yet to secure backing from either the Opposition or key crossbenchers needed to make the change law.

The modelling shows total council rate revenue has increased 67 per cent since 2008, compared with a 26 per cent jump in the consumer price index measure of inflation.

The rate increase is also more than double a special inflation measure used to calculate council costs.

Mr Knoll said capping council rate rises would enforce new discipline on an under-scrutinised local government sector, forcing them to think twice about unnecessary or wasteful spending.

“This analysis proves that councils have been gouging ratepayers for an extended time, and bill increases have been running well ahead of even their own cost increases,” he said.

“The State Government has already committed to cutting its cloth so we can deliver cost savings to households and business through Emergency Services Levy and payroll tax cuts.”

Mr Knoll said there were many examples of blatant waste in local government, including Onkaparinga council paying the golf fees of its chief executive Mark Dowd.

Local Government Minister Stephan Knoll at Adelaide Railway Station for a press conference. Picture: AAP / Kelly Barnes

“The State Government has had the same cost pressures of growth and demand for services over this same time period as councils, but their rates have gone up much more,” he said.

“The fundamental structure is wrong, and local government has less scrutiny than other levels.

“Necessity is the mother of all invention. A rate cap is going to force councils for the first time to take a good hard look at their own budgets and do more with what they’ve got.”

LGA President Lorraine Rosenberg has said “individual perspectives on this topic among mayors and councillors vary” but “as a sector we remain opposed to rate capping”.

“It hasn’t worked interstate, and won’t deliver significant savings to ratepayers,” she said.

She said a 2.5 per cent rate cap this year would have saved average ratepayers in metropolitan Adelaide “a mere $6” and insisted “local democracy is worth far more that”.

Under the model proposed by the State Government, councils would be set a maximum allowable rate increase in a year but allowed to seek exemption in exceptional circumstances.

Opposition local government spokesman Tony Piccolo said “all policy positions are up for review” after Labor’s election loss, and he had an open mind about rate capping.

He has been dispatched to meet with stakeholders before reporting to shadow cabinet.

“What has previously been put by the Liberals in Parliament is unacceptable,” Mr Piccolo said.

“We haven’t seen the (new) legislation, so we’re not sure exactly what they’re proposing.

“We have 68 councils and there’s high variation in size and you have rural and metro regions, so we want to understand the model, but it’s up to the Government to put the case.”

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