From the Newsroom

IPART sets lowest ever rate peg

Geoff Helisma

The Independent Pricing and Regulatory Tribunal (IPART) has set its lowest rate peg (0.7 per cent) since Clarence Valley Council’s (CVC) inception in 2004.

According to IPART’s website, prior to the latest decision the lowest state-wide rate peg was 1.5 per cent in 2017/18 – the rate has exceeded 3.0 per cent six times since 2004/05 and has only been below 2.0 per cent during 2016/17 to 2017/18 financial years.

The lower rate peg was brought about by IPART reviewing its methodology and, as a result, tying rate peg increases to population increases.

“Under the 2022-23 rate peg decision … IPART has set a rate peg for each council, ranging from 0.7 per cent to 5.0 per cent,” an IPART media release states.

“We have developed a way of incorporating population growth into the rate peg that balances the need to ensure councils are financially sustainable, while protecting ratepayers from excessive rate rises,” IPART chair Carmel Donnelly said.

“The methodology we have used will ensure councils maintain the average amount of money collected per person as their population grows.

“This will enable councils to provide services to their growing communities.”

In calculating CVC’s rate peg, IPART found that Clarence Valley’s population grew by 0.1 per cent, which IPART defines as 0.0 per cent growth, and that land supplementary valuations increased by 0.8 per cent.

Meanwhile, Clarence Valley Council’s special rate variation (SRV) was completed at the end of the past financial year.

The 25.97 per cent SRV – 8.0 per cent each year over three years – increased CVC’s revenue by $10.3million (not including the annual rate pegs).

Over the next 10 years, the extra $51.2 million collected above the rate peg must be spent on: roads maintenance and renewal; flood mitigation renewal; and renewal of sports facilities, open spaces, buildings and swimming pools.

In other rates-related news, IPART has “proposed a benchmark waste peg for 2022/23, to provide a guide to councils”, its media release states, and has “released a draft report on these charges, which may impact future decisions … and we are currently seeking feedback on our proposed approach”.

The draft report is aiming to establish “greater transparency for ratepayers’ household waste charges” – the draft report “found that the domestic waste charges levied by councils vary considerably between councils and, on average, have risen by 4.5 per cent per year, which is more than double inflation over recent years”.

“Our draft report proposes pricing principles to guide councils in calculating the level of waste charges,” the IPART website states.

“We also propose to publish an annual benchmark waste peg, which will provide a guide to councils and ratepayers on the level that waste charges should change each year.

“We consider that increased transparency will encourage councils to find efficiencies and help ratepayers to more readily engage with councils on the level of service they want and the price they are prepared to pay.”

The benchmark waste peg is proposed to be 1.1 per cent for the 2022-23 financial year – there was a 2.0 percent increase for many charges that CVC increased for the current financial year, however, there were also many charges that remained the same and others that increased more than 2.0 per cent.

IPART’s Draft Report on domestic waste charges, and opportunities to have your say, is available on IPART’s website; submissions to IPART are due by March 25, 2022.