GREAT Lakes Council will avoid a $2 million budget shortfall because the State Government has approved its request to keep charging its current rates.
The council’s 2003 11 per cent increase was on Local Government Minister Paul Lynch’s chopping block, but the Minister ruled out a discount for local ratepayers.
Great Lakes general manager Keith O’Leary said there will be no increase for ratepayers, just a continuation of the current rate on top of the pegged 3.2 per cent limit.
“It’s certainly not an increase for us. We would have had to decrease rates by 11 per cent if the continuation hadn’t been approved,” he said. “It’s such a weight off my shoulders, because we’ve been looking to hire new staff but had to put that on hold. Now we can bring those people in.”
The Local Government Association welcomed the rate increases and continuations for 22 councils across the State.
“We thank the government for recognising that councils are struggling to find money for crucial local projects,” president Genia McCaffery said.
“Astronomical election costs, cuts to the money councils can collect from developers, and population increases mean variations for a few councils are simply not enough.”
The council’s current rate was first approved in 2003, when it decided the rate peg injection could not support Great Lakes infrastructure. An 11 per cent rise was granted by then-minister Tony Kelly, on the condition it would only be for five years.
Placing a time limit on specially approved council rate increases was common practice, but has since been dispensed with. With the five years nearly up, the council applied in February to retain its rate and avoid a $2 million funding black hole.
The approval will ease the strain for the council, which was hit with a $63,000 cut in April when Minister Lynch dropped the rate peg from 3.4 to 3.2 per cent. The rate peg is the amount by which councils can (without special permission) increase their rates from year to year. It is unique to NSW, and local government bodies last week called for it to be scrapped.
“Rate pegging hampers councils’ ability to set rates according to local needs, but special variations at least allow them to source some revenue,” Shires Association president Bruce Miller said.
“It is ridiculous to suggest rates would sky rocket. Has this happened in other states? Councils are answerable to their communities at the ballot box and are monitored closely.”
The minister defended rate pegging as a necessary safeguard for ratepayers.
“Rate pegging strikes a balance between protecting ratepayers from unchecked rate rises and the genuine need for some councils to fund essential infrastructure,” Mr Lynch said.
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