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IPART sets two per cent rate peg

The Independent Pricing and Regulatory Tribunal (IPART) has set a maximum increase in rates revenue for the 2021/22 financial year at 2 per cent for NSW local governments.

While the rate is 0.6 per cent less than the 2020/21 rate peg, the 2 per cent increase “has recognised that councils face higher costs for their 2021 local government elections”, says tribunal member Deborah Cope.

“We have included an adjustment of 0.2% for election costs based on the expected costs for the average council in NSW,” she said in a media release.

“This allows councils to collect additional revenue in 2021-22 to meet the costs of the 2021 local government elections.

“The adjustment will be reversed through the 2022/23 rate peg, to ensure that ratepayers are not overcharged in subsequent, non-election years.

“IPART’s rate peg is based on the annual change in the Local Government Cost Index (LGCI), which measures the average costs faced by NSW councils.

“The rate peg reflects moderate price inflation over the previous year for most cost categories.

“The rate peg for 2021/22 is lower than recent years, which is a positive outcome for NSW ratepayers.”

Councillors have discretion to increase general income by the rate peg, less than the rate peg, or not at all, however, Clarence Valley Council (CVC) would be unlikely to adopt anything other than the maximum, given 2020/21 was the final year of the 8 per cent (including the rate peg) per year special rate variation over the past three financial years.

The rate peg applies to each council’s general income in total, not to individual ratepayers’ rates –CVC’s maximum permissible rates income over the 2020/21 year is $36,276,683.

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