Local Government NSW (LGNSW) has criticised calls for residents to simply not pay their rates in response to proposed increases in some Council areas.
The call comes after Northern Beaches Council voted to progress a 40% rate rise, with local Liberal MP, Matt Cross (pictured), slamming the Council as being “out of touch” with the local community.
On 28 January, Council resolved to apply to the Independent Pricing and Regulatory Tribunal (IPART) for the Special Variation. The application was submitted on 3 February.
The resolution followed an extensive 8-week consultation process including a letter to every rate payer, face to face engagement and an opt-in survey, Northern Beaches Council said in a statement.
Mr Cross said the increase would mean an average household would pay an extra $673 annually, with an average business forking out an additional $1,611 each year.
Former Prime Minister, Tony Abbott, has also voiced his opposition to the Council’s rate rise decision, suggesting residents boycott the move and refuse to pay the extra rates.
LGNSW President, Forbes Shire Mayor Phyllis Miller OAM said that while no-one enjoyed paying rates or taxes, boycotting them was not the solution.
“Councils do not make the decision lightly to put forward a proposal to increase their rates. We care deeply about our communities and we work hard to provide the infrastructure and services they need and deserve,” President Miller said.
“When a council does decide to propose a rate rise, they have looked at other options and these applications are fully reviewed by the Independent Pricing and Regulatory Tribunal (IPART), before they determine what increase a council may bring in, if any, above the rate peg.
“Councillors are very aware of the added financial burden this causes for their communities but deciding not to pay council rates is not going to help. The fact is that the financial sustainability of councils has been undermined by cost shifting, rate pegging, and other factors for over 40 years. These factors increase the burden on councils and reduce their ability to raise the appropriate revenue for community service delivery.”
President Miller said the LGNSW had long warned of the numerous threats to the financial sustainability of local government.
“The most prominent being rate pegs restricting income and the growing practice of cost shifting, where local councils are continually picking up the bill for State and Federal services,” she said.
“Cost shifting burdens councils and impacts their ability to provide essential services and infrastructure for their communities. LGNSW’s most recent cost shifting report estimated this to be equivalent to $1.36 billion in 2021-22. This is the equivalent of $460 per ratepayer annually.”
She also highlighted the support available to the public if people find themselves struggling to pay their rates notice.
“All councils have provisions on compassionate, or hardship, grounds for payment of rates. We would encourage anyone experiencing financial difficulties to contact their local council to discuss their circumstances.”
