Byron Shre Council (BSC) is proposing a 35.03 per cent Special Rate Variation (SRV) over three years and raising $83m over ten years. A decision is due on 3 December.
Council’s website provides information and an opportunity for questions with queries being raised about Council’s performance, the bed tax option, and why another rate rise after the four year, 30 per cent increase initiated in 2017.
Council finances are complex but could and should be more clearly explained.
The 2026/27 scenario without the SRV (base case) presents total income as $151.5m with rates and annual charges at $47.9m and user charges at $24.4m; with expenses including materials and services of $40m, employee costs of $34m; and a forecast net operating deficit of $14.5m.
The additional rate rise funds are proposed primarily for infrastructure, including 50 per cent on renewal, 20 per cent on maintenance, 10 per cent on climate adaptation, and 20 per cent on business resilience. Unfortunately, there’s not a list of projects.
This year Council adopted a Development Contributions Plan that will raise $109m over 15 years, and a Development Servicing Plan for water and sewerage, but not stormwater, that will raise approximately $72m. The plans identify works required to meet future growth of 4,258 dwellings as outlined in the BSC Residential Strategy 2041. However, it’s not clear that these future funds have been included in Council’s future financial scenarios.
But Council hasn’t advised the community of the current state government proposed reforms to support councils. The reforms are in response to the parliamentary inquiry titled: Ability of local governments to fund infrastructure and services.
Council’s 2024 submission highlighted the added pressure on infrastructure and services due to high visitation and coastal erosion.
In 2019 a tourism paper identified the cost of non-resident infrastructure and services was $23m per annum, which now equals the total 2025 residential rates yield.
Council hasn’t produced a breakdown of these costs to allow for applications to seek funding and compensation from state and federal governments for these non-resident expenses.
Also, Council hasn’t reviewed business rates which wouldn’t increase funding but would redistribute the rates yield and lessen the burden on residents. Currently BSC business rates are below the average.
Who should pay?
This relates to the capacity of residents to afford a rates increase and whether it’s fair that residents are effectively subsidising the tourism economy which is particularly relevant in the current cost-of-living crisis.
In May 2025 the government responded to the inquiry into the ability of local governments to fund infrastructure and services’ 17 recommendations, agreeing that reform for councils facing ongoing pressures is necessary, particularly in rural and regional areas, and that existing revenue sources aren’t keeping pace with increasing costs. It identified reforms to enable councils to recover costs and noted that financial information isn’t always clear or accessible, limiting effective decision-making and community oversight. The aim is to better align revenue and expenditure and improve financial transparency and accountability.
Proposals include reforming the rating system and special variations, a Comprehensive Spending Review (CSR) framework and a review of performance measures. The CSR guidelines focus on community need and transparency including reporting on operations not performing well and how to improve.
The 2026 BSC budget presents operating deficits for Sandhills and the Cavanbah Centres amounting to $1.3m but no remedy is provided. There’s also queries about Council’s holiday parks, First Sun and Suffolk Park, that operate as business units. But there’s no business case for upgrades and no explanation why a financial return to the General Fund isn’t allocated.
To meet criteria for rate rises, Council must identify other sources of revenue and quantify productivity improvements and efficiencies. A financial sustainability review is proposed but won’t be available for the SRV public consultation.
So why is Council presenting a rate rise now? Why not wait until the reforms are in place?
A better outcome would be to wait until the reforms are in place with the possibility of additional options for Council to recoup expenditure. The rate rise should be deferred until the reform process is clarified and the community is provided with enhanced transparency.
Council rates and funding information
www.yoursay.byron.nsw.gov.au/srv
www.parliament.nsw.gov.au/parliamentary-business/committees/inquiry-details?committeeInquiryId=3040
www.olg.nsw.gov.au/programs-and-initiatives/financial-sustainability-reforms
♦ Jan Barham is a former Byron Shire Council mayor and former Greens NSW MLC.
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