Proposed rate peg change ‘unlikely’ to help local councils
THE proposed changes to the Local Government Act to allow flexibility to the rate peg is unlikely to be beneficial for the Lismore City Council.
Reports suggest the Minister for Local Government, Shelley Hancock, is looking to table changes to the rate peg to enable them to better deal with unexpected adversity.
Under the proposed changes, councils which have chosen not to pass on full rate increases can apply those increases in future years.
Lismore City Council Mayor Isaac Smith said the proposed changes were unlikely to provide much financial relief to councils,
"There is nothing in this proposal for Lismore City Council, or any council I know, as they are all using the maximum rate peg each year," he said.
The proposed changes would allow councils to apply the additional rate peg only if they had not applied it previously.
However, some councils are open to the rate peg providing extra flexibility, provided the increase is feasible.
General manager of Ballina Shire Council, Paul Hickey, said council would "welcome any increased flexibility with regard to rate-pegging".
"Although any system must take into account the ability of the community to afford any increase in rates," he said.
Mayor Isaac Smith said council costs have regularly exceeded the rate peg in recent years, leaving council with few options.
"Council costs over the past decade have well exceeded the rate peg, which is why all councils in NSW have found it harder to deliver the services their community needs," he said.
"We have had to cut budgets every year.
"The only way councils have been able to cover the gap is by raising fees and charges to make it a user-pays system.
"But now with the COVID-19 impacts, that income has reduced drastically, leaving all councils with larger cuts to services.
The recent draft budget by the Lismore City Council recommended the council applies the full rate peg of 2.6 per cent for the 2020-21 period.