Households across the nation are struggling to pay essential bills and maintain living standards in the face of rising living costs. Now homeowners say extravagant council rate increases will tip them over the edge.
Residents in Sydney’s inner-west have blasted an “outrageous” 93 per cent increase in their council rates over the next four years, as other areas face average increases of nearly 50 per cent.
Seventeen NSW councils applied to the Independent Pricing and Regulatory Tribunal (IPART) for special variations to increase their general income over the ‘rate peg’, which determines the maximum increase councils can charge ratepayers.
Now IPART has released a final report outlining upcoming changes to the methodology used to set rate pegs in NSW, sparking fears of an extra jump in rates in coming years.
In 2023-24, the base rate peg in NSW was set at 3.7 per cent; in Victoria, a rate cap of 3.5 per cent was set for the 2023/24 financial year. However, as noted above, councils, which are also facing cost pressures, can apply for a special variation.
‘You don’t go out, you don’t socialise’
Pensioner Jim Howard lives in southern NSW and told the ABC that his rates could soon increase from about $1800 a year to $2100 – if his local council introduced a special rate variation.
“As soon as that $300 extra comes in, it [available income] is coming down to about $9 [a day] – you’ve got to feed yourself with that,” he said.
“It’s hurting big time. I’ve got my wife in care and that costs me extra money, I’ve got no money left as far as extras. You don’t go out, you don’t socialise.”
Ratepayers told IPART during the review period that their prime concern was the affordability of their rates and the impact a new rate peg methodology would have on their living costs.
Councils’ efficiency queried
They also questioned whether there was an effective measurement of councils’ productivity. Many indicated they were not confident councils use the money they collect through rates efficiently.
The upcoming changes have been made to support councils that are struggling financially, but the belief is that ratepayers will inevitably be hit with bigger rates bills.
The IPART review was brought about by concerns that rate pegs were being set too low, that they were determined based on outdated data, and that the current methodology did not address the differences between different types of councils (i.e. rural, regional and metropolitan).
That has resulted in an increase in councils needing to apply for a special variation, which adds an extra administrative and financial burden.
The Combined Pensioners and Superannuants Association (CPSA) fears the changes will have a major impact on age pensioners, those relying on government support and anyone on a low income.
Concessions not indexed
CPSA senior policy officer Ash Fowler says pensioner concessions for council rates are not indexed and have not changed since they were introduced in 1993.
“Currently, the general rebate is set at a flat $250, regardless of changes to costs of living and actual council rates.”
He says the CPSA supports an Independent Pricing and Regulatory Tribunal recommendation for a comprehensive statewide evaluation of existing pensioner concessions “with consideration to potential initiatives to enhance support for vulnerable ratepayers”.
The National Debt Hotline says if you are having difficulty paying your council rates, you should talk to your local council as soon as possible.
“Most local councils have ‘hardship programs’ that offer assistance to ratepayers experiencing financial hardship and struggling to pay their rates.”
It also says to be sure to check for rebates and concessions.
If you are receiving a Centrelink benefit or you’re of Age Pension age, check that you’re getting the concessions and rebates you are entitled to.
Where to find help in your state or territory
Australian Capital Territory: Rates assistance
NSW: Apply for council rates rebates
Northern Territory: NT Concession Scheme
Queensland: Rates subsidy
South Australia: Cost of living concession
Tasmania: Council rates remission
Victoria: Rates concession
Western Australia: Local Government Rates Rebate
Are council rates a burden for you? Will that affect your ability to stay in your home in the longer term? Share your thoughts in the comments section below.
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