Perth councils face rate rise pressure as cost-of-living crisis deepens

An “inflation-fuelled” financial year has left some Perth metro local governments scrambling to balance 2024-25 rate rises against the cost-of-living crisis – with a difference of 3 to 8 per cent between councils.

Waste disposal, staff pay rises and other significant increases to core operational costs above inflation had all been factors in the Town of Victoria Park’s proposed 8 per cent hike, according to town documents.

These include increases of 90 per cent for verge collections, 200 per cent for bulk collections, 30 per cent for road construction and traffic control, 7-10 per cent for insurances and 4.5 per cent for employee costs.

“The 2024-25 rating year is a challenging budget to balance after an incredibly high inflation-fuelled 2023-24 lifted Town costs across the board,” a report to Council said.

While some councils, such as the Cities of Joondalup and Perth, which both have rises under 3 per cent, have remarkably lower rates than the Town of Victoria Park, not all council rates are directly comparable.

Both Joondalup and Perth separate bin collection fees from regular rates, whereas Victoria Park does not, resulting in a lower perceived rate rise in the former.

Despite a City of Perth council report stipulating its 2.95 per cent proposed increase was at the lower end of the scale to other metro local governments’, it also said the city had faced a “hot economy with cost pressures on numerous fronts”.

These included significant increases in employee costs, outsourced services, utilities and insurances.

In an emerging trend around the metro area, the city has also imposed higher rates on vacant land to encourage development and discourage land-banking.

So far, an average rate rise of about 4.4 per cent has emerged from the 22 of 31 metro local governments to have adopted or proposed rate increases.

For those hoping stabilising inflation will relieve pressure in coming years, a City of Fremantle report said there would likely be a “lag” of three to four years before local governments saw reductions in costs.

“In the context of local government, while some inflationary pressure may be beginning to ease, costs associated with delivery of construction and other services will remain high in the short term due to those contracts commencing or being entered into in prior years when inflation was still high,” the report said.

To address these significant increases, a rate rise of 5.4 per cent has been proposed for Fremantle and will be considered at a budgetary meeting later in June.

Each local council will either adopt or amend proposed rates, as well as other fees such as waste, during budget considerations in the coming month.

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