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Verdict on rate rise proposals


The Independent Pricing and Regulatory Tribunal (IPART) has rejected Port Stephens Council’s proposal for a rate rise but approved and partially approved applications in Muswellbrook and Dungog.

The three Hunter councils had applied for a special variation to increase their general income above the 2.7% rate peg, which would come into effect on 1 July 2019.

Port Stephens proposed to increase rates by 7.5% per annum over seven years for a total of 65.9%. It was met with a 10-month community campaign and a record 681 submissions by local residents.

Muswellbrook requested a permanent 15.13% single year increase to replace a temporary special variation of 12.43%, which expires at the end of June, while Dungog sought a 97.8% increase over seven years.

IPART reduced this to 76.0% over five years.

The decisions mean that rates in Port Stephens can increase only by the 2.7% rate peg, in line with other councils across NSW that did not apply for a special variation.

Muswellbrook ratepayers face a $21 increase in 2019/20 if the council proceeds to implement the approved change.

Dungog council can increase its annual residential rate by $135 per annum, with similar increases in rates over the following four years.

IPART chair, Dr Paul Paterson, said special variations gave councils flexibility to generate additional income above the rate peg to meet specific needs.

However, he added IPART had to consider whether there was a genuine financial need for additional revenue for a council to be financially sustainable and to fund future infrastructure projects or asset renewal requirements in their region.

“In the case of Port Stephens, we found that the impact on ratepayers is not reasonable due to the absence of a strong financial need and demonstrated willingness to pay for the proposed works,” Dr Paterson said.

“It is clear that Dungog council has a clear and urgent need for increased funds.

“However, given the magnitude of the proposed increase and uncertainties around budgeting, IPART considered it was prudent to approve the special variation for a period of five years, not seven as requested.”

The three Hunter councils were among 13 across the state to apply for special variations for 2019/20. Of the 13, eight were approved in full, three were partially approved, and two – Port Stephens and Tamworth – were declined.

Visit ipart.nsw.gov.au for the full report.

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