Queanbeyan-Palerang Regional Council (QPRC) area residents could soon see a hit to their hip pocket, with council applying for permission to change the special variation rate.
Councillors unanimously agreed on a motion to ask the Local Government Minister for a 2.5 per cent special variation rate for 2022/23 through the Independent Pricing and Regulatory Tribunal (IPART).
Currently rates for the region are pegged at 0.7 per cent.
Councillor Katrina Willis supported the motion, saying that 2.5 per cent is what is broadly expected IPART will recommend for 2022/23 anyway.
“It’s quite clear … that it will be impossible to run the council without this extra income,” she said during the recent council meeting (Wednesday 13 April).
“For a reason that no one seems to understand, IPART proposed for us a 0.7 per cent [rate cap, which] does not cover our staff wage rises, so it’s important we have the funds to do the work that we need to do.
“Given that this is the quantum of rate cap that we’ve seen in recent years, I think that the community would not be surprised if we support this; I do think it’s essential.”
Council’s 2021/22 Long Term Financial Plan (LTFP) assumed a rate peg of 2.5 per cent and a population factor of 1.9 per cent.
A report stated due to IPART’s historically low rate peg of 0.7 per cent, “council will not have sufficient funds to meet its obligations as identified in the 2021/22 LTFP when they fall due in 2022/23 and beyond.”
It also said council had been considering a number of savings options and that it considered “the impact on ratepayers and the community if the special variation [of 2.5 per cent] is approved for 2022/23 and future years, is reasonable.”
Councillor John Preston stated the 2.5 per cent rate peg would eliminate the predicted budget shortfall.
“[It] will generate $951,000 in additional rate income each year,” he said.
“The special variation is required for QPRC to fund its service obligations set for 2022/23 and in future years.
“The cost of providing infrastructure and services is increasing faster than revenue and the previous council had predicted a 2022/23 budget shortfall.”
Cr Preston also pointed out the rate rise would cover the upcoming staff wage increase.
“Within this there is a well-deserved staff award that will deliver an additional 5 per cent in wage increase to council staff and I think that’s a good outcome,” he said.
Cr Willis however stressed she doesn’t want the community to think that just because council voted to apply for this increase, it would support future rate rises.
“It’s certainly not something that I am supporting at the moment,” she said.
The report stated QPRC would continue to assist ratepayers in financial hardship through payment arrangements.
IPART is accepting an additional round of 2022/23 special variation applications from councils across NSW.
Councils need to apply by 29 April 2022, after which IPART will publish the applications for community consultation for at least three weeks.
IPART will notify councils of its decisions regarding their special variation applications no later than 21 June 2022.
Separately, IPART has agreed to undertake a broader review of its rate peg methodology.