At an Extraordinary meeting held on January 28, Federation Council endorsed an application to be lodged with the Independent Pricing and Regulatory Tribunal (IPART) for a permanent 69.94% increase to general rates over two years - commencing 1 July 2025.
It is important to note that the above increase effectively includes the temporary 19% increase applied in 2023/24 and temporary 17% applied in 2024/25.
There has been community engagement on a future Special Rate Variation since mid 2021. Feedback from IPART in June 2023 detailed improvements that could be made to Council's community engagement around the proposed increase to general rates, with improvements since implemented. Comprehensive community engagement was undertaken in May 2024 and July 2024 on the need for the proposed SRV increase and the impact that it would have on ratepayers and the ability to renew assets that are important to the community.
In addition to the additional rates sought, Council has continued with its productivity and efficiency program, and as evidenced in the application, has delivered over $800,000 of savings/efficiency improvements in each of the previous five years, with further commitments noted for future years. Unfortunately, savings and productivity and efficiency improvements alone are not enough to arrest years of underfunding, with this being a systemic issue across many rural and regional councils.
The application remains consistent with and informed by the many recent community engagement initiatives on the SRV reapplication process, including the community sessions facilitated by Professor Joseph Drew/The University of Newcastle in May and July 2024.
Federation Council Mayor, Cr Cheryl Cook said the decision made by Council to proceed with a Special Rate Variation application was a decision that was not made lightly. In fact numerous deliberations and debate has taken place with the previous and current councillors.
"We understand this is a significant increase, and we want to be as transparent as possible with our community," she said.
"As discussed in the Council meeting, ratepayers have already received over half of this increase across the last two year period in a temporary capacity, so we are half way there. We have extensively engaged with residents throughout this process, and we believe this application reflects their feedback and the critical needs of our community."
Mayor Cook said the rate increase is essential for upgrading the Council's extensive road network, maintaining essential services, and ensuring the long-term sustainability of Federation Council.
"I sincerely thank the community for their participation and engagement in this process thus far," she said.
"I am confident that IPART will carefully consider our application based on the evidence presented and the community's needs. Council encourages all residents to review the application and stay engaged."
IPART will determine the application across the following criterions:
Demonstrate financial need for additional revenue;
Provide evidence that the community is aware of the need for and extent of a rate rise;
Demonstrate a reasonable impact on ratepayers;
Exhibit relevant council documents to the public; and
Explain council's productivity improvements and cost containment strategies.
The Special Rate Variation Application will be submitted by February 3, and will be available shortly thereafter on the Council website and IPART website. Residents are encouraged to view the application and associated documents. A public submission opportunity directly to IPART will occur in February, before a final decision will be announced by IPART in May 2025.
Estimated impact on Total Rate Revenue
The proposed permanent SRV, if approved, will provide an additional $2.4 million in general rates in 2025/26, increasing total general rates to $15.4 million. When compared to 2024/25, this is an increase of 19%. This would be followed by an additional $1.8 million in 2026/27, an increase of 11.8%.
If not approved, total general rates for 2025/26 will reduce from $12.9 million to $10.6 million, a reduction of 18%. This would be followed by an additional $0.5 million in 2026/27, based on an estimated rate peg of 4.5%.
The following table provides more detail on this impact.
Estimate of Impact on Average Rates
The proposed permanent SRV, if approved, would result in average residential rates increasing from $961 in 2024/25 to $1,144 in 2025/26 (an increase of 19% or $183) and $1,279 in 2026/27 (an increase of 11.8% or $135).
If not approved, average residential rates will reduce from $961 in 2024/25 to $809 in 2025/26 (a decrease of 16% or $152) and $846 in 2026/27 (an increase based on an estimated rate peg of 4.5% or $38).
The following graphs display the impact for each category.
Council is very conscious of the hardship that a Special Rate Variation may cause. If you are experiencing hardship, you are encouraged to contact Council for assistance under Council's hardship policy. View the hardship policy.
