MidCoast Council has welcomed the potential for changes to the way rates and rate charges are implemented.
The Independent Pricing and Regulatory Tribunal (IPART), which is responsible for regulating rates and increases, this week released a draft report proposing changes to the way rates are structured.
“It is clear that IPART has listened to councils and the community and have made sensible recommendations to adjust the rate peg methodology,” said MidCoast Mayor, Claire Pontin.
The rate peg is the maximum amount in percentage terms by which a council can increase its total rates income in a year. IPART sets this percentage every year as the delegate of the Minister for Local Government.
In developing the draft report IPART received feedback from different councils and ratepayers across the State.
“Importantly IPART has acknowledged all councils in NSW are not the same and proposes a methodology which groups councils into Metropolitan, Regional and Rural,” Mayor Pontin said.
Under the proposed change MidCoast Council would be categorised as regional.
Under the proposed changes the controversial Emergency Services Levy will also be acknowledged and considered, including an adjustment based on each council’s individual emergency services levy impact.
“IPART has also recognised that in addition to adjusting the rate peg the financial model for Local Government needs to be investigated to address financial sustainability issues,” Mayor Pontin said.
“The report recommends an independent investigation into the financial model for NSW Councils.
“We will examine the detail of the report and provide comments to IPART by 4 July and look forward to the final report being issued in August 2023.”
The Tribunal this week thanked the ratepayers and councils who have given feedback as part of the rate peg review.
“The consultation has been very helpful and we propose changes to IPART’s rate peg
methodology as a result,” said IPART Chair, Carmel Donnelly.
There were nearly 3,400 responses to the survey of ratepayers and more than 90 submissions to the Tribunal’s Issues Paper.
“Our review has shown the current rate peg methodology can be improved, to better reflect changes in council costs to maintain services, while continuing to help ratepayers by limiting increases in total rates revenue to what is needed,” said Ms Donnelly.
“We propose more forward-looking measures of councils’ base costs, and our changes also better capture the diversity of councils across the State.”
She said the proposed new rate peg methodology was designed to respond to many of the issues raised in the consultation.
“But it cannot address all the issues people have highlighted during the consultation. The
rate peg cannot adequately address the efficiency or sustainability of the cost base of councils.”
The Tribunal believes it would be timely for the NSW Government to initiate an independent investigation into the financial model for councils in NSW, including broader issues highlighted in IPART’s recent consultation, Ms Donnelly said.
“We encourage stakeholders to make submissions on the Draft Report, by 4 July 2023. This is available on IPART’s website. We will also hold an online public hearing in July 2023.”
She said IPART will consider all feedback before finalising its review and submitting the Final Report to the NSW Government in August 2023.