Councillors plan to split 15% rate rise over two years
Published on 27 February 2025
After nearly three hours of debate at the February Council meeting, Councillors have decided to stage the 15% rate rise approved by the Independent Pricing and Regulatory Tribunal (IPART) over two years. Instead of a single increase, rates are expected to rise by 7.5% in 2025/26, with a potential further 11.5% increase the following year (2026/27).
Why not implement the full rate rise in one go?
The decision reflects a balancing act between financial sustainability and community impact. Councillors acknowledged that Council cannot maintain current services and service levels without additional revenue to cover the cost of these services. At the same time, they recognise that the rate rise will be difficult for ratepayers.
By spreading the increase, Council aims to give the community more time to adjust while ensuring essential services—such as road maintenance, waste management, and community programs—can continue. Councillors also expressed a commitment to finding further savings, improving efficiencies, and exploring new revenue sources to help manage budget shortfalls.
Why does the staged increase appear to add up to more than 15%?
This is down to two key reasons. First, delaying the full increase means that to reach the same level of overall rates revenue, the second year’s percentage needs to be higher. Second, by not implementing the full 15% in 2025/26, Council will need to take out additional loans to maintain enough unrestricted cash to stay legally compliant. More loans mean more to repay, which ultimately means more cost to Council and ratepayers.
Importantly, this decision is not final. The actual rate rise for 2025/26 will be determined at the June 2025 Council meeting. Until then, Council staff will be drafting a budget that accounts for the planned increase, while continuing to assess ways to reduce costs without cutting vital services.
This approach reflects an acknowledgement of the pressures on household budgets and a desire to ensure Kempsey Shire Council can afford to continue providing the services residents rely on.