NSW council rates review to determine how much ratepayers can be charged for services

A review into how much local councils can slug ratepayers for services could result in higher fees — but the head of IPART says it is ‘too soon to tell’ if rates will rise.

Ratepayers across the state could be set to face yet another slugging at the hip-pocket, with a review of the rate peg imposed on NSW council set to review how much you can be charged for local services.

The Independent Pricing and Regulatory Tribunal (IPART) is set to investigate how council rates are set, following intervention by NSW Premier Dominic Perrottet and Local Government Minister Wendy Tuckerman.

“The rate peg protects ratepayers from excessive increases in council rates by limiting the total amount by which councils can increase revenue from rates each year,” an IPART chair Carmel Donnelly said. “We need to make sure that local councils can continue to provide services to their communities, while at the same time protecting ratepayers from unnecessary rate increases.”

Currently, caps to rates are determined by annual costs faced and population growths, however, IPART will investigate “new” ways to determine rate, with a look at changes in

inflation and local government costs.

Ms Donnelly told The Daily Telegraph it was “too soon” to determine whether the review will result in higher rates for residents across the state.

“We are reviewing it to deal with volatility in economic conditions, labour costs and inflation,” she said. "The intention is to protect ratepayers, while ensuring council can provide services.

Ms Donnelly said the current process for determining rate pegs resulted in a “time lag” for councils.

“This review will consider if we can address inflation more quickly,” she said.

The IPART chair said residents could see changes by the 24/25 financial year.

Shadow Local Government spokesman Greg Warren said ratepayers shouldn’t have to pay the price of government failures and “inadequate support for councils”.

“The financial modelling for council rates do need to be reviewed, but with the cost of living pressures that residents are facing, residents should not have to bare the brunt of poor decisions from the NSW Government,” he said.

Local Government Minister Wendy Tuckerman said “IPART has been asked to recommend a rate peg methodology that supports the sustainability of councils by ensuring annual rates income is varied based on inflation and changing costs for the delivery of services and infrastructure”.

“The primary purpose of the rate peg is to protect ratepayers from excessive increases in their rates bills, and IPART is required to consider this key factor as it conducts its review,” she said. “IPART will undertake extensive consultation as part of its review and ratepayers are encouraged to have their say.”