A PROPOSAL to raise rates by just 0.7 per cent next year could "aggravate" already under-funded road maintenance across the region, according to Wagga City Council.
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The council's general manager Peter Thompson said he is "not happy" with a 0.7 per cent rate increase, or the methodology used by the state's pricing tribunal in which determined the figure.
Mr Thompson said the set rate won't allow for council to keep pace with the city's infrastructure needs.
The Independent Pricing and Regulatory Tribunal (IPART) announced this week that for the first time local government rates will be linked to population growth from 2022-23.
The decision means set rates levied by each NSW council will rise between 0.7 and 5.0 per cent.
"It reflects the decline in local government assets that will be experienced over the coming years, and that has already been experienced for decades," Mr Thompson said.
REROC Chairman and Acting Chair of the Riverina Joint Organisation Cr Rick Firman said as a result of the new rates councils across NSW will have to consider cutting services and facilities if they want to maintain any "semblance of a balanced budget."
"Regional and rural councils across NSW have struggled through drought, bushfires and COVID, supporting their communities wherever they can. To provide these services councils have had to draw on their reserves both financial and staff," Mr Firman said.
"Now we are expected to pull a rabbit out of a hat and make a next to nothing increase in rates to provide a viable base for operations."
Tribunal chair Carmel Donnelly is standing firmly behind the formula, having said the rate's new methodology recognises some councils face higher costs from growing populations.
"We have developed a way of incorporating population growth into the rate peg that balances the need to ensure councils are financially sustainable while protecting ratepayers from excessive rate rises," Ms Donnelly said.
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"The methodology we have used will ensure councils maintain the average amount of money collected per person as their population grows."
But while that may be the case, Mr Thomson said the method has already failed.
"Whilst we have the positive population growth, it hasn't materialised in any additional income to respond to that growth, and the 0.7 per cent represents an incredibly low increase in the amount of income which we can raise," he said.
"Councils never raise funds sufficient to pay the bills each year- if you reduce that, council will quite rapidly descend into insolvency and financial crisis.
"The only thing that can come out of this, is what we're already doing, and the community is already not happy with the amount of the road work we're doing, but it will be funded to a lesser amount next year."
Local government minister Paul Toole said at the end of the day the community will be pleased there is rate pegging.
"This gives the community the certainty as to what the cost might be when it comes to [paying rates each and every year]," he said.
"We know the cost of living is a big issue for the community and for mums and dads at home. To know that their rates aren't going to be skyrocketing each year is very important. However, we do know there are pressures that are put on councils, especially when it comes to providing basic infrastructure around roads and running services and facilities.
"This doesn't take away the opportunity for councils to put through applications for variations to their rate pegging limit. They can apply to the office of local government each and every year and that can actually go then towards providing upgrades to roads or even better services in the local community."
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