Rodney Stevens

Ratepayers in the Clarence Valley are faced with a 2.5 per-cent increase in council rates following the approval of an increase above the annual rate peg limit by the Independent Pricing and Regulatory Tribunal to 86 NSW councils.

Every year, the Independent Pricing And Regulatory Tribunal IPART calculates a rate peg, which determines how much councils can increase rate revenue by.

In early 2021, IPART reviewed its rate peg criteria, including population growth in its calculation.

This year the rate peg limit was set at an historic low of 0.7 per-cent, which applied to Clarence Valley Council.

IPART Tribunal Member Deborah Cope said the 0.7 per-cent rate peg was determined at the beginning of the Covid-19 pandemic, when inflation was low.

MS Cope said since the determination of the rate peg limit, inflation had increased, which also increased councils’ costs.

“Some councils have demonstrated that without additional funds they will not be able to deliver the projects that they have already consulted on and included in their budgets,” MS Cope said

Across the 86 NSW council’s that applied, the increases range from 1.6 per-cent to 2.5 per-cent.

With only a 0.7 per cent rate increase, Clarence Valley Council was faced with a loss of income due to rising costs, which would have resulted in council not being able to deliver projects it had budgeted for.

Clarence Valley Council Acting General Manager Laura Black said the rate peg increase will allow council to retain jobs and deliver services to ratepayers.

“Clarence Valley Council welcomes IPART’s decision to approve the application for a 2.5 per cent rate increase submitted after the April monthly meeting,” Ms Black said.

“The historic low-rate peg of 0.7 per cent originally handed down by IPART represented a reduction in projected income of $670,000 which would have resulted in a reduction of services and loss of employment. 

“Council would not have been able to deliver on projects already included in its budget.

“The 2.5 per cent increase will allow Council to operate normally and as planned in 2022/23.” 

Land rates are based on the property land values in an area and determined in accordance with the Local Government Act 1993.

Rates are also determined by the main use of a property and fall into four rating categories: residential, business, farming or mining. 

For ratepayers with an annual rates bill of $2000, the 2.5 per cent increase equates to an increase of $50.

Clarence Valley Council’s rate income for the year ending 30 June 2021 was $66,472,000.