A new report suggests rate-capping in SA would lead to higher costs for ratepayers.

The report funded by the Local Government Association of South Australia (LGA) says capping rates charged by councils would increase debt, slow down infrastructure works and see higher fees passed on to ratepayers.

The findings come from a comparison of outcomes for councils between SA and NSW, which has enforced a cap on rates since 1977.

The LGA has begun to fight against the proposed change ahead of a state election next March.

The report, by University of New England Professor Brian Dollery, said rate-capping NSW had a negative effect on smaller councils in particular.

“Councils with capped rates have higher levels of debt and larger infrastructure backlogs than those without rate capping and also have higher fees and charges that they pass on to their communities,” Professor Dollery said.

“In fact, rate capping leads to a decline in the financial sustainability of councils.”

But the Opposition says rate-capping in NSW led to “the lowest council rates in the nation”.

SA’s Liberal opposition wants an independent regulator to tell councils what rate increases they can apply, based on the cost of services they provide.

Local Government Minister Geoff Brock says residents would not “necessarily be better off under rate-capping” and that interstate evidence showed the policy “can restrict the level of services councils can provide”.

LGA SA president Lorraine Rosenberg says rate-capping has “failed” in NSW, and is already starting do diminish council services in Victoria after just a year of the policy.

“Before making up their minds on this policy, we’re asking people to imagine what their community would be like without their local library, recreation and sporting facilities, food inspections, hard waste collection, jetties, parks, events, street trees or public toilets,” she said.

“Rate capping would squeeze council budgets to the point where all services that are not mandatory under legislation would be at risk.”

The LGA has pointed to the maintenance of jetties as an example of the policy's flaws.

There are about 110 jetties across SA, more than 70 of which are owned by the State Government but maintained by councils through lease arrangements.

The LGA says councils have spent millions on jetties over the past decade, despite not being required to by law.