Millions in NSW to cop big rate rise as councils cite ‘high inflation and global uncertainty’

Millions of homeowners will be slugged with increased rates with councils blaming “high inflation and global uncertainty” for rising costs.

Millions of homeowners in NSW will be slugged with increased rates, with councils blaming “high inflation and global uncertainty” for the rising costs of services.

The state’s Independent Pricing and Regulatory Tribunal (IPART) approved applications by 86 NSW councils to increase their rates above the level of the annual rate peg.

You can see a full breakdown of the rate increases for the 86 affected councils below.

IPART said the “modest” increases of between 1.6 per cent and 2.5 per cent were approved following an additional special variation process.

Inflation blamed

“The latest rate peg was determined in the low inflation environment at the beginning of the Covid-19 pandemic,” Tribunal member Deborah Cope said in a statement.

“Since then, high inflation and global uncertainty increased councils’ costs. Some councils have demonstrated that without additional funds they will not be able to deliver the projects they have already consulted on and included in their budgets.”

Each year IPART calculates a rate peg which sets how much councils can increase the revenue they collect from rates.

This year the rate peg was set at a minimum of 0.7 per cent with some further increases allowed in councils with growing populations. The rate peg was lower than many councils expected. The additional special variation process gave councils an opportunity to increase this figure.

Rates will rise for millions living in NSW.

“We were careful to balance the need of councils to maintain the services and investment they had already committed to against the need to keep rates affordable for the community,” said Ms Cope.

IPART is reviewing the rate peg methodology to deal with volatility in economic conditions. The review will also look at the timing of the calculations in a fast-changing economic climate.

“Our review will be looking at how to deal with this challenge in the future,” said Ms Cope.

Rates soar in Brisbane

The NSW decision comes just a few days after Brisbane City Council told residents it will increase by 4.93 per cent, the highest hike in 12 years.

The rate rise comes with the announcement of a record $4 billion budget, which aims to tackle the $220 million cost of Covid-19 in the city and a $330 million flood damage bill.

The budget will include $2.65 billion in operating expenses and $1.35 billion in capital expenses, to establish, improve and rebuild damaged infrastructure.

Originally published as Millions in NSW to cop big rate rise as councils cite ‘high inflation and global uncertainty’