Revealed: The winners and losers from the verdict on Sydney’s council rate hikes

Ratepayers on the northern beaches face a 25 per cent jump in their rate bills, while residents in nearby North Sydney have been spared a soaring 87 per cent hike to payments, after the state’s independent pricing regulator approved increases to levies for five local governments.

As debate about the financial sustainability of local governments simmers, the Sydney councils’ bids to raise the income they collect from hundreds of thousands of ratepayers sparked a wave of anger from residents and businesses, who vented their fury at fiery council meetings earlier this year.

Ratepayers urged the council to cut spending, sell off assets or peddle the naming rights to North Sydney Oval.Credit: Wolter Peeters

The Northern Beaches Council and four regional councils were allowed special rates variations to hike levies above the 3.6 to 5.1 per cent cap set by the Independent Pricing and Regulatory Tribunal (IPART) for 2025-26. More than 70 councils in fast-growing areas have an additional allowance of up to 3.8 per cent.

The Northern Beaches Council had requested a 39.6 per cent increase over three years. The tribunal partially approved that application, meaning ratepayers face a jump of 25 per cent over two years.

About 200 protesters interjected, shook maracas and waved placards objecting to the rates hike when councillors narrowly voted in favour of requesting the 40 per cent increase in January.

North Sydney Council’s application for an 87.05 hike over two years was rejected. The tribunal also knocked back the council’s application to increase its minimum rates for residents by $833, and for businesses by $1091, over two years.

Mayor Zoe Baker said on Thursday the decisions were “incredibly disappointing” and meant the council would need to consider cutting services or selling assets.

“As a councillor who fought tirelessly to stop the increased scale and rushed decision-making of the North Sydney Olympic Pool project, it pains me that the liquidity crisis caused by this project will continue to have impacts on council’s service delivery and capacity to maintain and renew infrastructure for the foreseeable future.”

The council warned earlier this year it would need to make “critical decisions” to fix its “unsustainable” finances.

North Sydney Council partly blamed its financial woes on the troubled redevelopment of North Sydney Olympic Pool. Credit: Dion Georgopoulos

Baker told a hostile crowd at a meeting in February that the council’s beleaguered $122 million North Sydney Olympic Pool redevelopment – which has been frustrated by years of delays, cost blowouts and legal stoushes – was to blame for nearly 30 per cent of the required rates rise.

IPART chairwoman Carmel Donnelly said the decisions were based on the tribunal’s assessment against NSW Office of Local Government criteria, and from public feedback during consultation.

She said councils applying for special variations had to demonstrate the need for extra revenue, establish that the financial toll on affected ratepayers was reasonable, and show residents had been adequately informed about the proposal, among other criteria.

“When it came to North Sydney, the tribunal wasn’t convinced on a number of the criteria,” she said.

Donnelly said there was confusion among ratepayers about how much of the revenue from any rate rise would help fund the pool redevelopment, versus how much would go into financial reserves.

“The next step is for the council to put the work into alternatives,” she said.

Baker said the tribunal’s decision highlighted the urgent need for the NSW government to adopt the recommendations of a recent Upper House inquiry into the ability of local councils to fund infrastructure and services.

The tribunal also approved a one-off rate hike of 12 per cent in Shoalhaven, a 33 per cent increase over three years for residents in the Upper Hunter Shire, a jump of 70 per cent over two years for ratepayers in Federation Council and a 38 per cent increase over two years in Gunnedah Shire.

For more than a decade, IPART has been charged with setting the maximum annual increase that local councils can levy ratepayers, known as the “rate peg”. The tribunal does, however, allow councils to request the ability to levy businesses or households with higher rates than the overall peg as part of a special variation process.

Donnelly said the councils with approved special variations were encouraged to consult their communities to decide how best to implement the allowed increases to rate payments.

“It’s important to note that elected councillors can choose when they implement the approved increase in rates income, including deferring any increases for up to 10 years and also how they set rates across the rating categories.”

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