NSW to be slugged with higher council rate fees

RATEPAYERS across NSW will be slugged with higher council fees after a ruling from the pricing regulator. The Independent Pricing and Regulatory Tribunal gave the green light today. Here is how much you’re expected to cough up.

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RATEPAYERS across NSW will be slugged with higher council fees after a ruling from the pricing regulator.

The Independent Pricing and Regulatory Tribunal gave the green light to councils to raise the rates they charge homeowners by up to 2.7 per cent in 2019/20.

The increase is the biggest in recent years, mostly due to higher labour, energy and construction costs, IPART says.

Rates were only allowed to go up 2.3 per cent this financial year and 1.5 per cent a year in 2017/18.

Chairman Peter Boxall said it was up to each council to decide whether to apply the increase in full and across all households, businesses or other ratepayers.

“The Local Government Cost Index increased by 2.7 per cent to June 2018,” Dr Boxall told The Northern Star.

The Independent Pricing and Regulatory Tribunal gave the green light to councils to raise the rates they charge homeowners by up to 2.7 per cent.

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“Since the rate peg applies to general income in total, and not to individual rate assessments, it is up to each council to determine whether to apply the allowed increase in full and how to allocate the increase between households, businesses and other ratepayer categories.

“Similarly, if councils want to increase their revenue by more than the rate peg they will need to consult with their communities before applying to IPART for a special variation.”

IPART has brought forward the release of the rate peg from December to September from this year onwards. This change provides councils with more time to prepare annual budgets, and better engage with their communities on potential special variation applications.

Councils wishing to apply for a special rate variation must notify IPART by November 30, 2018.

IPART is required to set the rate peg each year under delegation from the NSW Minister for Local Government.

The main components of the index and their percentage share of the overall index are:

— Employee benefits and on-costs (41.7 per cent)

— Construction works — roads, drains, footpaths, curbing, bridges (19.2 per cent)

— Other expenses (8.9 per cent)

— Other business services — including items such as contractor and consultancy costs (6.0 per cent)

— Buildings — non-dwelling (4.1 per cent)

— Plant and equipment — machinery (3.4 per cent)

— Electricity (2.7 per cent)

— Road, footpath, curbing, bridge and drain building materials (2.4 per cent).