Councils will now be capped at increasing rates to 1.8%.
Councils will now be capped at increasing rates to 1.8%. Marc Stapelberg

Rate increases from councils to be capped at 1.8%

COUNCILS will only be able to increase rates by 1.8% in 2016-17 reflecting minimal rises in council costs.

The rate peg is determined by the Independent Pricing and Regulatory Tribunal (IPART) each year and sets the maximum general income NSW councils can collect.  

The main component of general income is rates revenue, but it also includes some annual user charges.  

It excludes stormwater, waste collection, water and sewerage charges.

IPART Chairman Peter Boxall said the rate peg is determined by changes in the Local Government Cost Index (LGCI) that measures changes in the average costs faced by councils.

“The Local Government Cost Index increased by 1.78% in the year to September 2015, reflecting the continuing low inflationary environment and modest rate of public sector wages growth since late 2012,” Dr Boxall said.

“When costs are stable there is no justification to increase the burden on ratepayers beyond inflation.

“Since the rate peg applies to general income in total, and not to individual rate assessments, it is up to each council to determine whether to apply the allowed increase in full and the impact on individual rate assessments.

“Similarly, if councils want to increase their revenue by more than the rate peg they will need to consult with their communities before applying to IPART for a special variation.”

The deadline to notify IPART of a special rate variation is 11 December 2015.

A fact sheet on the rate peg is available on IPART’s website: www.ipart.nsw.gov.au.

IPART is required to set the rate peg each year under delegation from the NSW Minister for Local Government. 



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