Councils face public criticism for big rates jumps

Councils who hit residents and businesses with inflation-busting rate hikes have been warned by a new watchdog: keep your rates under control or we will name and shame you.

Local councils that hit residents and businesses with inflation-busting rate hikes will be named and shamed by a state government watchdog.

An Essential Services Commission of SA report has found councils across the state increased rates by a combined average of 88 per cent in the 13 years between 2007-08 and 2019-20.

The rise was nearly three times the 30 per cent rate of CPI over the same period.

The report, released this month, said from now on the watchdog would examine council budgets on the hunt for “large or unplanned year-on-year variances” in rates.

The watchdog’s CEO, Adam Wilson, said councils that ignored ESCOSA’s advice resulting in a bad outcome for ratepayers would be publicly criticised and forced to publish the comments to its ratepayers.

“It is all about transparency and pointing out potential risks, the outcomes for ratepayers, as well as things going well,’’ Mr Wilson said.

“If (councils) are doing well, we will tell them they are doing well.

“Or we may say, ‘well, your rates are already up here, but you want to do all these things, so how are you going to fund that?’”

The new watchdog scheme would not have the power to force councils to alter their budgets or reduce rates revenue.

Supplied Editorial Adam Wilson

Norwood Payneham and St Peters Council this year increased residential rates by an average of 7.4 per cent, compared to inflation of 4.7 per cent, to fund major capital works.

Norwood Residents Association president Ian Radbone said the hike was a shock to householders after a decade of relatively low increases.

“Certainly regular council surveys of residents have shown a shift from wanting rates to be kept low to wanting better quality footpaths, verges and road pavements.

“We can understand that council has a bit of catching up to do ... but why have residents been hit so hard compared with businesses?”

ESCOSA’s push to keep tabs on council spending follows the former Liberal state government’s failed attempts to introduce rate-capping laws.

In a submission to an ESCOSA inquiry into the issue, the LGA objected to rate rises being limited to stay in line with CPI.

Norwood Residents Association head Ian Radbone, whose council had the biggest rates rise this year. Picture: Naomi Jellicoe

Uniting Communities spokeswoman Jen Dunkley said her organisation “strongly supports” ESCOSA’s new monitoring role.

“Council rates have to be affordable,’’ she said.

“This will provide for greater transparency for ratepayers and help with a clearer understanding about the drivers for council rate increases.

“Council rates (increasing 88 per cent in recent years) are putting substantial additional cost pressure on a very large number of low and modest-income households, particularly renters and newer homebuyers who have struggled to buy into the housing market.”

Ms Dunkley also said rising property values had given councils a “windfall gain”.

Opposition local government spokesman and former LGA president Sam Telfer welcomed the reform, which was written into legislation by the Liberals.

“Accountable councils which do the right thing by their ratepayers have nothing to worry about with this important and much-needed change,’’ he said.

“But now there’s nowhere to hide for councils that are being irresponsible with unexplained rate rises or budget expenditure.

“Cost-of-living pressures are biting harder than ever and South Australian councils have a responsibility to strive to minimise that financial impact on family budgets the best they can.”

Originally published as Councils face public criticism for big rates jumps