Today’s announcement by the Independent Pricing and Regulatory Tribunal that it has set a baseline increase on rates (known as a rate cap) of 0.7 per cent will mean further pressure on Kiama Council’s budget in the coming year.

It is not only the lowest rate cap increase in 20 years, it is half the size of the previous lowest rate cap – at a time when councils across the state are under financial pressure on various fronts.

Jane Stroud, CEO of Kiama Council says, “As we are already running a deficit operational budget, this extra reduction will affect our bottom line negatively.

“We already know hard decisions will need to be made, and today’s Independent Pricing and Regulatory Tribunal announcement adds further downward pressure.”

In recent years a rate cap increase of around 2 per cent has been the norm. Today's announcement will leave Council with a shortfall of around $250,000 on what was expected to be raised from the rate cap this year.

Local Government NSW (LGNSW) President, Darriea Turley, says the baseline rate cap is a devastating blow to councils already struggling to recover from droughts, bushfires, floods and the COVID pandemic.

“It will come as a real kick in the guts to councils who are already working so hard to help their communities recover from the events of the past two years.

“The baseline rate peg is based on the costs of goods last year, when the economy was in a pandemic-induced slump.

“It does not recognise the skyrocketing cost of commodities, as supply chain delays really start to bite, and NSW begins to emerge from the COVID pandemic.

“The cost of fuel is up nearly 100%, so that alone with have a major impact on operating costs for councils.

“IPART too has decided to apply the public service wage increase of 1.2% instead of the 2% guaranteed to councils workers for 2022.

“That means councils will have to dig deeper into their existing funds to pay their staff, so that is another very real impact.”