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Byron Shire
January 23, 2022

IPART decision sees council rates to grow with the population

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The Independent Pricing and Regulatory Tribunal (IPART) have announced this morning that the amount that councils will be able to increase the revenue they can collect from rates will depend on their level of population growth.

Under the 2022-23 rate peg decision, IPART has set a rate peg for each council ranging from 0.7 per cent to 5.0 per cent.

Tribunal Chair Carmel Donnelly said that in setting the rate peg for 2022‑23, IPART has used a new methodology that recognises that some councils face higher costs from growing populations.

Financially sustainable council – protected ratepayers

‘We have developed a way of incorporating population growth into the rate peg that balances the need to ensure councils are financially sustainable, while protecting ratepayers from excessive rate rises.

‘The methodology we have used will ensure councils maintain the average amount of money collected per person as their population grows.  This will enable councils to provide services to their growing communities,’ said Ms Donnelly.

IPART’s rate peg also takes into account the annual change in the Local Government Cost Index (LGCI), which measures the average costs faced by NSW councils.

The rate peg represents the maximum percentage amount by which a council may increase its general income. For almost all councils, general income consists entirely of revenue from rates.

Rate peg applies to councils’ general total income

The rate peg applies to each council’s general income in total, not to individual ratepayers’ rates.  Councils may increase categories of rates by more than, or less than the rate peg, as long as the total increase in general income remains within the rate peg.

Individual ratepayers’ rates are also impacted by land values set by the Valuer General NSW.

An Information Paper that includes information on IPART’s rate peg methodology and the rate peg for each council for 2022-23 is available on IPART’s website.

Ms Donnelly said IPART has proposed a benchmark waste peg for 2022-23 to provide a guide to councils. ‘IPART has released a Draft Report on these charges which may impact future decisions, and we are currently seeking feedback on our proposed approach.’

IPART’s Draft Report on domestic waste charges, and opportunities to have your say are available on IPART’s website.  Submissions to IPART are due by 25 March 2022


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4 COMMENTS

  1. Hang on. If the population increases, they’re collecting rates from more people! So why the hell would we all have to pay more? They already did a huge rates increase a couple of years ago (supposedly a one-off increase to help pay for road repairs). Since 2016 my rates have gone from $520 to $730 a quarter! I can see a time when I’ll no longer be able afford the rates and have to sell the bloody house.

  2. RATES RORT
    What’s interesting about this new model for rates is that there seems to be no mention of the fact that the State government has been taking away money from Federal Assistance or “FAGS” grants as part of the so-called local government ‘reform’ program. For some councils this loss has been significant leading to shortfalls in budgets. We are told that council has a shortfall, implying it is somehow our fault, which has to be made up by a special rate variation and that if we don’t support it ‘services will suffer’. But there is NO MENTION of the loss of FAGS funding as the reason for the shortfall. It is just those greedy ratepayers expecting too much and they have to learn to pay their way. No consideration of differences in councils with regard to social disadvantage, location, etc.
    Make no mistake the State government has been relentlessly ‘cost shifting’ to ratepayers and using the spare money for pork-barreling to show what ‘good guys’ they are. All those wonderful Wagga Wagga ‘special projects’ provided by the State! Wow, what great money managers, at our expense. Did I mention the $4.6 billion iCare loss as another example of great money management!
    This ain’t reform. Pity no-one bothered to point out the FAGS losses. Looks increasingly as if IPART is just the government’s hand-maiden for cost-shifting.

  3. They are not collecting more rates from more people as much of the housing is unauthorised.
    I’m surrounded by it.
    So I get to pay more rates to subsidise all the rorters !!!

    Typical bureaucratic answer to a problem.

  4. Most people rent, so I guess the logic is “more people: more rental income: higher costs: higher rates”
    Pretty crude and surely going to feed into the perceived binary between wealthy estate owners and urban expansion…

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