Council levies to jump 2.7 per cent for most NSW ratepayers
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Council levies to jump 2.7 per cent for most NSW ratepayers

Council rates for most NSW homeowners will increase by 2.7 per cent next financial year, following a decision by the pricing regulator on Tuesday.

The proposed rate is larger than it has been in recent years. The Independent Pricing and Regulatory Tribunal attributed the size of the so-called “rate peg” to higher labour, energy and construction costs.

But councils warned that the increase would not be sufficient for them to address backlogs in local infrastructure.

City of Sydney councillor and President of Local Government NSW, Linda Scott.

City of Sydney councillor and President of Local Government NSW, Linda Scott.

“This leaves all the state’s councils in the difficult position of looking for alternative sources of revenue,” said the President of Local Government NSW, Linda Scott.

For much of the past decade, IPART has been charged with setting the maximum annual increase that councils can levy ratepayers. Two years ago the pricing regulator allowed only a 1.5 per cent increase, while the rate peg last year was 2.3 per cent.

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The decision to lift the allowable rate increase by 2.7 per cent in 2019-20 was based on the general increase in costs faced by local governments.

“It is up to each council to determine whether to apply the allowed increase in full and how to allocate the increase between households, businesses and other ratepayer categories,” said IPART’s chairman, Peter Boxall.

IPART does, however, allow councils to request the ability to levy businesses or households with higher rates than the overall “peg”.

Last year, for instance, IPART received 13 variations for special rate variations, including from Sydney councils Randwick City and Willoughby.

IPART approved Randwick’s request to be able to lift rates by almost 20 per cent over three years to pay for an increase in community services and projects, but declined Willoughby’s request for a special rate variation.

Cr Scott, a City of Sydney councillor, said she welcomed the fact that the 2.7 per cent increase was higher than previous years, but said it would “only meet increases in staff, energy and other costs”.