Council reluctantly raises rates by an average of $100
Published on 18 June 2024
The Kempsey community have confirmation of a special increase in their rates for the coming year as councillors took the necessary, but difficult, final step in their year-long rate review process.
Kempsey Shire Council will raise property rates by 7.9%, a permanent increase that was previously approved in May by the Independent Pricing and Regulatory Tribunal (IPART). This is 3.2% higher than the already approved rate peg increase of 4.7%.
In dollar terms, the average dollar increase, per household, for the year commencing 1 July 2024 will be $100.
In addition, Council set the charges, including domestic waste services, stormwater management services, water charges and sewerage charges which have risen by 3.8% in line with the anticipated Consumer Price Index.
Kempsey Shire Council Mayor, Leo Hauville, said the decision reflects a responsible balance of financial prudence and community need.
“We are living through challenging times and this difficult decision reflects the immediate concerns raised by our ratepayers and the need to generate increased income to secure our shire for future generations,” said Cr Hauville.
“Council too is facing many increasing costs in providing services to the Shire. We have deliberately set a lower increase in the coming year in recognition of the cost of living challenges faced by our community, and to give us time to achieve additional organisational savings.”
“It is important to note that we have also adopted a new financial sustainability plan today, committing us to streamline services, to secure financial sustainability. Council will remain focussed on reducing costs, and ensuring the right services are being delivered in the most efficient way. We will continue to fight for increased Federal and State funding to overcome their cost-shifting to Councils.”
Council has been given permission to raise rates by a total of 24% over the next two years, including this rise of 7.9% by IPART, the NSW Government’s independent pricing regulator. In June next year Councillors will decide on a possible 15% increase to property rates in 2025-26.
The application for a special increase, and the IPART approval, came about after more than a year of community consultation and engagement, most recently through the public exhibition of the budget and planning documents for the coming year.
Craig Milburn, General Manager for Kempsey Shire Council, said the onus was now on Council to deliver on the promised cost savings and efficiencies.
“This rate rise isn’t a miracle cure, it’s an essential step, but the whole organisation is now focused on the difficult decisions that will need to be considered over the next 12 months to address the ongoing funding gap,” said Mr Milburn.
“The IPART report provided an objective, external confirmation of the immediate financial need for the special variation and the impact on ratepayers. In short they felt the impact on Council and on ratepayers is reasonable. There is still a significant forecast deficit to manage, and over the next year we will look for savings, conduct service level reviews, and align those services with the most efficient staffing levels. We will also continue our advocacy work to other levels of government to identify a more equitable funding model.”
On 14 May 2024, IPART released its decision on Council’s application for a special variation to increase its general income by more than the rate peg. Council had applied to permanently increase its general income by 42.7% over a 3-year period from 2024-25 to 2026-27 inclusive. The report states:
Our decision will allow the council to maintain a stable financial position over the next 2 years, while it undertakes the work required to establish whether it can reduce its costs and improve its financial sustainability through alternative means.
We consider the impact of our decision on ratepayers is reasonable. With the approved Special Variation, the council’s average residential rates will be in line with the average for neighbouring councils and slightly higher than comparable councils.
Council has also made submissions to the state and federal government inquiries on the financial sustainability of local government. These have highlighted concerns with the existing rate peg methodology, the halving of taxation revenue support for local government and cost shifting by the state government – including a total cost shift of $1.36 billion to Councils in 2021-22, the equivalent of $460 per ratepayer annually. These submissions can be found on Council’s website.
In the coming months Council will be communicating with all rate payers about the timing and impact of rate increases and the revised hardship relief processes available to minimise impacts on ratepayer’s capacity to pay. The information can be found on Council’s website.
The full list of rates, fees and charges can be found on Council’s website.