Illawarra council rate hikes to ease off next year

Illawarra residents are in for a little bit of household budget relief next year, after facing years of hefty rate hikes from Wollongong and Shellharbour councils. 

The Independent Pricing and Regulatory Tribunal this week announced councils would only be able to raise rates by 1.5 per cent for the 2017/18 year, 

Since 2013, Shellharbour rates have gone up 43 per cent due to a Special Rate Variation of up to 10 per cent each year, while in Wollongong, there has been a cumulative rate rise of about 21 per cent since 2014.

Both councils will revert to the statewide rate peg next financial year, which will also apply if the councils merge.

For the average residential ratepayer across both council areas, rates (excluding waste charges and the NSW Government’s Emergency Services Property Levy which starts from July 1, 2017) are expected to rise by just $21 next year – a stark contract to the triple figure rises of the past few years.

In Wollongong, the 2017/18 average rate charge will be about $1444, while in Shellharbour it will be $1436.

IPART said low inflation and minimal growth in council costs were behind its decision to set a low rate peg.

While the decision is likely to come as a small relief to residents, the Local Government NSW Association has warned the lower than usual rate rise amount could hit council budgets.

"IPART has come to the 1.5% figure despite an increase of 2.3% in employee benefits and on-costs, and an increase of 2.7% in non-residential building construction costs,” LGNSW President Keith Rhoades said.

"But that just fails to recognise the ongoing squeeze on councils that comes from the combination of rate-pegging and cost-shifting, and deteriorating infrastructure.”

However, both Illawarra councils said there would be a minimal effect on their budgets, despite council staff assuming a higher rate rise in their financial forecasts.

Spokeswomen from both councils gave assurances the organisations were “well-positioned” to meet infrastructure maintenance and renewal costs despite the lower revenue, as this would be offset by “lower than anticipated costs”.