Lachlan Shire Council will increase its rates by 1.8 per cent after approval was granted by the Independent Pricing and Regulatory Tribunal.
Council’s submission was one of 86 applications approved by IPART to increase their rates above the level of the annual rate peg.
Lachlan Shire Council’s General Manager Greg Tory welcomed IPART’s decision but emphasised he was very well aware of the rising cost of living expenses currrently being experienced by ratepayers.
“While Council is pleased that IPART and the state government listened to Local Governments concern that, the previously announced 0.7 per cent rate cap was grossly inadequate to meet the rapidly increasing cost of delivering basic community services, Council is also concerned about the changing financial landscape for households with electricity charges, fuel costs and groceries all raising much faster than people can afford,” he explained.
“I would like to take this opportunity to remind residents that, if they are experiencing difficulty in paying their rates they should talk to Council as soon as possible to discuss payment options that may include commencing a payment plan to help spread the cost of their rates”
According to IPART, “The modest increases were approved following an additional special variation process.”
“The latest rate peg was determined in the low inflation environment at the beginning of the COVID-19 pandemic,” Tribunal member Deborah Cope stated.
“Since then, high inflation and global uncertainty increased councils’ costs. Some councils have demonstrated that without additional funds they will not be able to deliver the projects they have already consulted on and included in their budgets.
“The modest increases for councils are between 1.6 per cent and 2.5 per cent including the rate peg.
“Each year we calculate a rate peg which sets how much councils can increase the revenue they collect from rates.
“This year the rate peg was set at a minimum of 0.7 per cent, with some further increases allowed in councils with growing populations. The rate peg was lower than many councils expected. The additional special variation process gave councils an opportunity to increase this figure.
“We were careful to balance the need of councils to maintain the services and investment they had already committed to against the need to keep rates affordable for the community.”
Applications were assessed against guidelines provided by the Office of Local Government.
The guidelines require councils to show that they had budgeted for higher income than that provided by the rate peg and that they need the additional money to deliver on the projects they have already planned and included in their budgets.
IPART is reviewing the rate peg methodology to deal with volatility in economic conditions. The review will also look at the timing of the calculations in a fast-changing economic climate.
“Our review will be looking at how to deal with this challenge in the future,” Ms Cope concluded.