Independent Pricing and Regulatory Tribunal (IPART) has approved Ballina Shire Council’s application to increase its general income through a permanent special variation (SV) of 26.25% [in rates] over four years, from 2026-27 to 2029-30.
IPART say in its decision, ‘The council advised us it sought the special variation to’:
• address an asset renewal shortfall and maintain its core infrastructure areas of roads, stormwater, footpaths, open spaces, sports fields and community buildings
• expand its Healthy Waterways program
• implement its Biodiversity Strategy
• implement crime prevention programs, including the operation of federally funded CCTV infrastructure’.
IPART say, ‘We made the decision to approve the council’s proposed permanent SV in full after balancing the council’s financial need for additional income to deliver its core services, with the impact of the proposed rates increase on its ratepayers’.
‘Currently, the council’s operating expenses exceed its revenue, and without the SV, the council would not meet the OLG Operating Performance Ratio benchmark until 2033-34. This is unsustainable if the council is to continue delivering the services and infrastructure in its adopted plans.
‘The council also has a shortfall of around $9 million per annum between its annual depreciation expenses and its asset renewal budget. This shortfall is reflected in its infrastructure sustainability indicators which demonstrate that asset depreciation will outpace the council’s ability to replace its assets.
‘Under the proposed SV, this shortfall would decrease, strengthening the condition of the council’s asset base over time. We found that the council’s community consultation was satisfactory.
‘It provided a wide range of engagement methods and sufficient opportunities for the community to provide feedback on the SV proposal. It also provided the community with sufficient information about the need for and extent of the proposed SV.
Objections
‘We heard objections to the SV proposal due to concerns about affordability. We acknowledge that the proposed rate increase may create affordability challenges, particularly with the current cost-of-living pressures.
‘However, we consider the impact of the proposed SV on ratepayers is generally reasonable, taking into account that the council’s average residential rates under the SV would remain below the averages for comparable councils based on locality and the SocioEconomic Indexes for Areas (SEIFA) rank. We also found that the population of the Ballina Shire local government area (LGA) has less socio-economic disadvantage than its neighbouring councils based on selected indicators, including median household income.
Hardship policy
‘The council has an appropriate hardship policy to assist vulnerable ratepayers. We also heard concerns around how well the council manages its finances. As part of our assessment, we considered whether the council had pursued productivity savings. We found that the council has a robust approach and an ongoing strategy to realise cost containment and productivity savings.
‘We considered that its Business Process Improvement Taskforce has delivered efficiency gains, proportionate to the size and resources of the council where past initiatives have resulted in $3 million in ongoing savings. The council has scheduled several service reviews for further improving its productivity and efficiency.
‘We found that the council partially met the reporting conditions attached to its past SVs. Notwithstanding the non-compliance with some reporting conditions, we consider it is appropriate to grant the SV. Complying with reporting conditions is integral to the SV process as it allows the council to be held accountable for its expenditure to the community. However, the remaining criteria were sufficiently addressed, and on balance, this ultimately supported approval of the council’s SV’.
For more visit https://www.ipart.nsw.gov.au/node/926?review_id=2009
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