The NSW Government is looking at a special one-off rate variation for planned infrastructure and community services.

In what could be a temporary reprieve from financial disaster, Local Government Minister Wendy Tuckerman has cleared the way for a special one-off rate variation. 

Last year, councils were left reeling when IPART handed down a historic low 0.7 per cent baseline rate peg despite surging inflation, soaring fuel and other commodity prices and a mandated wage rise for staff.

The unexpectedly low rate peg reportedly forced councils to look at recasting their budgets, scrap planned infrastructure projects and consider service and job cuts just to stay afloat.

But Ms Tuckerman has told an Estimates Committee of the NSW Parliament that councils will now have almost two months to apply to IPART for a special one-off rate variation if they can show the funding was critical to undertake planned work identified in last year’s financial planning process.

The one-off variation could exceed the 0.7 per cent rate peg, but would still be capped at a maximum of 2.5 per cent, the Minister said.

Additionally, she tasked IPART with undertaking a broader review of its rate peg methodology, including the Local Government Cost Index, to prevent a reoccurrence of the 2022-23 anomaly.

“The opportunity to increase rates by up to 2.5% is still less than inflation, but it is in line with what councils expected when they finalised their budget, work planning and community consultation process last year,” says Local Government NSW (LGNSW) President Cr Darriea Turley.

“That process was undertaken very soberly and responsibly, to allow councils to continue to help drive a locally led economic recovery while minimising the impact of rates rises on individuals.

“We are really grateful to Minster Tuckerman for recognising the seriousness of the situation and responding to LGNSW’s urgent advocacy on council’s behalf.

“The road to recovery will be incredibly tough, particularly when you consider the devastation caused by current widespread flooding across the state.

“The last thing we want as we emerge from the pandemic is to send our regional and rural communities into a downward spiral from which they cannot recover.

“So, on behalf of NSW councils, I thank not only the Local Government Minister, but also Treasurer Matt Kean and Premier Dominic Perrottet for responding quickly to what could have been a death blow.”