Woollahra Council seeking feedback over a potential 15% rate increase in coming years

By ERIN MODARO

Ratepayers in Woollahra Council could continue to see rate increases in 2023 and beyond, as council is considering submitting an application to the Independent Pricing and Regulatory Tribunal (IPART) for a Special Rates Variation (SRV).

Special rates variations allow councils to increase yearly rates at a percentage beyond the cap, or rate peg, that the IPART has set.

Woollahra Council has released three models of rates hikes for the community to consider. Under one of the options a special rate increase of 15% is posited for 2023/2024, bringing the average residential annual rate to $1739, if this model were adopted.

Woollahra Mayor Susan Wynne said in a statement that the “reality” is that under the current rate peg, “[council] simply do not have the income and funds we need to undertake the projects we know are important to you, our community”.

“The rate peg amount is still considered to be too low as it doesn’t allow Council to achieve financial sustainability or meet the growing demands of the community on priority projects” said Woollahra Council General Manager Craig Swift-McNair. 

3 models explained

Under the first option supplied by Woollahra Council in the ‘Have Your Say’ information, no rate increase would take place. However, Council notes this option will “not provide financial stability”.

Option 2, the more moderate of rate increase options, would see a SRV of 10% in 2023/2024, making the average residential rate $1665 for the year. Option 3 brought forward the 15% rate hike.

Both option 2 and option 3 would cap rates at the IPART rate peg after 3 years, and decrease the special variation by roughly 5% for 2024/2025. This means that if the special variation were to go ahead, rates would go up by either $42, $70 or $96 per annum on average depending on which model is decided upon.

The council’s previous submission to IPART was approved in June 2022, which allowed them to increase rates by 2%, beyond the current rate peg which is set at 0.7%.

Residential ratepayers in the Woollahra LGA paid a base rate of $645 for 2021-2022, plus additional rates proportional to land value.

Swift-McNair said Woollahra Council is seeking input on which option to pursue as Council considers financial transparency “important”.

“We consider it important to let the community know where we stand financially and what we need to do if we are to secure financial sustainability and undertake the projects that are a priority for residents and businesses” Swift-McNair said.

Councils across NSW apply for rate increases

Woollahra’s rate hikes are not isolated- councils across Sydney and NSW are applying for SRVs to keep in line with rising costs from inflation. IPART approved 86 NSW councils for SRVs of between 1.6% and 2.5% this June.

A neighbouring eastern suburbs council was approved for a 2.5% rate increase as well as a domestic waste fee increase of 2.2%.

Now, The IPART is predicted to set the rates peg for many NSW councils at 3.7% in the next financial year.

IPART released a media statement in June saying that the 0.7% rate peg was calculated during the low inflation environment of the pandemic, and acknowledged that many councils found it was low.

“Since then, high inflation and global uncertainty increased councils’ costs. Some councils have demonstrated that without additional funds they will not be able to deliver the projects they have already consulted on and included in their budgets,” Tribunal member Deborah Cope said.

Woollahra Council says that the increased incomes from the special rates would go towards heritage, infrastructure, transport, climate response, and other key community projects and developments.

Submissions to council about the SRV close on Sunday October 9.