NSW councils have welcomed IPART’s changes to the rate peg methodology as a victory for common sense, which should help ease the pressures currently pushing councils to the financial wall.
Local Government NSW (LGNSW) said IPART was to be congratulated for listening to the genuine concerns of the local government sector.
“The new rate peg methodology is simpler than the old method and will result in rate pegs that more accurately reflect the very real impact that the changing cost of service provision has on councils,” President Cr Darriea Turley AM said.
“It’s a really positive outcome after an enormous amount of work and advocacy, not only by LGNSW but by individual councils who helped the IPART recognise the challenges they face.”
Cr Turley said the changes to the methodology announced by IPART included:
• Forward-looking rather than retrospective indicators, to help rates keep pace with costs
• A base rate calculation that recognised the different financial challenges faced by different kinds of councils, from large metropolitan to small rural councils
• Three further components which have a specific budgetary impact on councils, including employee costs, asset costs and other operating costs
• ESL adjustment components factored into the rate peg calculations.
“IPART has accepted the need for major change in the way the Emergency Services Levy was applied to councils,” Cr Turley said.
“It’s a clear recognition that the discontinuation of the State Government’s ESL subsidy has smashed council budgets, and that the continued payment of this levy by councils has a major impact on their financial sustainability.
“I commend IPART for the hard work they have put into developing a new and far more appropriate rate peg methodology, as well as all the councils who through LGNSW came together to help bring about this change.”