Stalled council rate cap will leave ratepayers with massive bill hikes, State Government claims

Ratepayers have been stuck facing “massive” hikes in their council rates this year, the State Government claims – because the proposed cap stalled in Parliament.

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Council rate rises would have been limited to 2.9 per cent if an election promise to cap increases was approved, sparking State Government claims that political gridlock has sentenced SA to “massive” price hikes in the coming year.

The Essential Services Commission of SA was tasked with setting a cap for 2019-20, and its report has been released to The Advertiser. However, the cap plan stalled in Parliament and the Government says ratepayers will now pay the price.

ESCOSA, which oversees water bills and other utilities, chose the 2.9 per cent increase as it matched the general inflation in costs facing councils.

The report was prepared as the new Government raced to meet a cap start date of 2019-20, and states there should be future reviews “with a view to refining and settling any ongoing improvements”.

The Government failed to put the reform plan to a vote in the Upper House after the Opposition and crossbenchers signalled plans to shoot it down, amid complaints from councils that the “blunt tool” would force cuts to public services.

Local Government Minister Stephan Knoll said many councils were now planning to lift their rate takes to levels well above what the cap would have kept them to.

Local Government Minister Stephan Knoll. Picture: AAP / Sam Wundke

“Households and businesses will now be paying millions of dollars more than if the cap had been in place,” he said.

“We were elected to deliver lower costs to the people of SA, Parliament shouldn’t be blocking relief for households.

“Now that we know what the rate cap would have been, we know which councils are hurting their ratepayers with above the odds rate hikes.”

Figures released by the Government, and strongly disputed by the Local Government Association, show metro councils including Playford and Adelaide City among those set for rises of more than 2.9 per cent.

Others which the Government says are headed for total rate rises over the proposed cap are Adelaide Hills, Campbelltown, Charles Sturt, Prospect and Norwood, Payneham and St Peters.

The figures show many regional councils poised to bust the would-be cap, planning rises of up 6.2 per cent. However, the capping model would have let them seek exemptions for special circumstances including small communities and expensive infrastructure.

The Government says recent draft residential rate rises spruiked by the LGA, which average about 2.5 per cent in the metro area, ignore other impacts, including property price increases and growth.

Mr Knoll said: “We’re focused on the bill a household or business is getting, not other creative ways of counting”.

LGA president Sam Telfer said councils had responded to communities by making efficiencies that now had them on track to deliver the “lowest average rates increase in years”.

He said that was despite increasing pressures in the waste and recycling area due to China’s refusal to accept certain rubbish, and higher State Government fees and taxes.

“Driving downward pressure on council rates is a shared responsibility between state and local, and all cost pressures must be fully understood,” Mr Telfer said.

Opposition councils spokesman Tony Piccolo said the Government’s credibility on cost of living was “in tatters” after it had jacked up State Budget fees and charges.

“These increases touch all households – whether it’s the car rego, drivers’ licence renewals, public transport fares, parking fees,” he said.

After publicly rejecting the Government’s plans for rate capping, the Opposition revealed its own package to control councils which included more transparency and limits on perks and spending.

That plan had support from the crossbench, but has been rejected by the Government in the Lower House. It is unclear if or when the Government will put its cap to a vote.