What if the Special Rate Variation application is unsuccessful?

Published on 09 May 2024

Council’s application for a Special rate Variation (SRV) is currently before the Independent Price and Regulatory Tribunal (IPART), with a decision expected in May.

There has been plenty of discussion about why Council has applied for a rate increase, and the benefits to the Shire’s ongoing financial future of the proposed rise.

However, when the decision from IPART comes through, what if the answer is ‘no’?

One part of the answer to that question is the Financial Sustainability plan, which details how Council will find the savings to address our financial challenges – irrespective of the IPART decision.

This detailed plan focuses on areas that will have the most beneficial financial impacts, including a plan to deliver identified cost savings of $5 million over the next ten years.

The plan requires that council seeks more savings in every departmental operational and staffing budget, asset management and service delivery initiative, as well as streamlining, and improving processes to ensure that best value, effectiveness, and efficiency for the community are being achieved.

The financial plans, currently on exhibition, also contain modelling for Council’s finances should the SRV application be unsuccessful.

If ‘yes’, the actions from the Financial Sustainability plan will help get Council to a position where the full rate increases may not need to be implemented in 2025-26 and 2026-27.

However, a ‘no’ response from IPART means there will be an $80 million deficit over next ten years, which cannot be solved solely through the Financial Sustainability plan.

An additional important body of work would then be required over the next financial year. This would include a review and likely reduction of service levels and asset maintenance schedules to ensure the organisation remains financially sustainable.

This could see numerous services reduced or ceased completely, staff reductions and assets being kept beyond their estimated useful life, involving increased associated risks.

In either scenario, the planning and reporting documents which are currently on exhibition for community feedback, are integral to planning for the financial sustainability of our Shire.

To read and provide feedback on these documents go to our Your Say Macleay page: ksc.pub/Budget-2024