Bega Council’s plan to almost double rates revealed amid purse-string pinch

Faced with the fallout from floods and fires, a NSW south coast council plans to almost double homeowner’s rates permanently, despite admissions it could put “undue pressure” on cash-strapped residents. Find out why.

The Bega Valley Shire Council will vote on November 16 on whether to apply for a permanent special rate variation of 90 per cent. Picture: Facebook

As residents across the NSW south coast battle skyrocketing cost of living, so too are the region’s local governments with one council proposing to almost double homeowner’s rates permanently in a bid to keep the lights on.

The Bega Valley Shire Council will vote on Wednesday on whether to apply to the NSW Independent Pricing and Regulatory Tribunal for a 90 per cent permanent special rate variation, or SRV, amid a budget shortfall.

From fuel for road repair vehicles to employee meals and supply costs, the far south coast council’s expenses have outstripped its income in recent years, documents submitted to the council by staff reveal.

“As the cost to deliver services and maintain community assets increases above the income the council obtains each year, it places pressure on the council to continue to deliver the same services with less money,” a council staff report states.

“We know our community values the services we provide and places high priority on the maintenance and renewal of our infrastructure when it is needed, so the current trend of exceeding our income needs to change.”

Psychologist Paul Perfrement with what is left of his Yowrie home in the Bega Valley. Picture: Jonathan Ng

Since the 2019-20 bushfires, the council’s financial situation has become increasingly volatile, staff admit.

The proposed rate hike would generate an additional $23.1 million, alongside a 4.1 per cent SRV approved by the tribunal earlier this year.

But, council staff claim it could also negatively impact residents.

“The council is aware that an SRV may cause undue hardship for ratepayers who have been impacted by the bushfires and pandemic,” a council staff report states.

“But, we can no longer push the issue aside.

“The council understands that rate rises of any kind are never welcome, but believes that a SRV is a necessary course of action.”

The move comes as the region faces the fallout from fires, floods, and a worsening housing crisis.

In October, Bega Mayor Russell Fitzpatrick wrote to ratepayers in a bid to see holiday homes released into the rental market.

The NSW Tenants Union claims the vacancy rate in Bega sits at just 0.4 per cent, well below the agreed healthy average of 3-5 per cent.

Union CEO Leo Patterson Ross said that while there was limited evidence rate increases were passed on directly to renters, the housing market in towns like Bega were no longer operating on a “fair market value“.

“Tenants in Bega are desperate for a home,” Mr Patterson Ross said.

NSW Tenants Union CEO Leo Patterson Ross. Picture: Supplied

“Because there’s barely anything available, they’ll pay essentially anything they can to get into a home.

“Everyone is really anxious, and what they are paying is heavily inflated.”

Mr Patterson Ross admitted nothing was stopping a landowner trying to pass on the cost of a potential rate increase to a tenant, but said such increases were not the driving factor behind increasing rental fees and instead blamed flood and bushfire recovery.

Council staff claim to know of at least 15 other councils which intend to apply for an SRV in 2023.

That number is significantly higher than in most years, with increases in general rates being sought ranging from 5-86 per cent.

Should the increase pass, the council has until November 24 to lodge a non-binding “notice of intent” with the IPRT.

The amount of the SRV will then be finalised at a future council session in February 2023.

Councillors will also consider three other options, including a staggered SRV increase, a smaller increase, and no increase at all.