Rates to increase but residents to ‘choose’ the hike
In an unusual move, Willoughby City Council is asking residents to choose between four rate rise options to stave off ‘financial difficulty’ by 2025.
The council foreshadowed ‘insolvency’ back in May without a special rate variation (SVR) of 15 to 20 per cent, as it struggled – like many NSW councils – to deal with COVID-19 revenue losses, overdue infrastructure repairs, high inflation and the scrapping of the temporary infrastructure levy.
Now it has offered residents a stark choice – a minimum 12 per cent rate rise, or ‘widespread service reductions’. Rates across the state usually rise by 3.5 per cent a year, but councils must apply to the NSW Government for an SRV for any increase higher than the rate cap. Many councils this year have applied for an SRV, citing inflation and lost revenue during COVID-19 as the biggest dents on their multi-million dollar budgets.
Under Willoughby’s options, a ‘normal’ rate increase of around 3.5 per cent would result in reduced services. Services would be maintained under a 12 per cent rise, while 15 per cent would increase services. With 20 per cent (up to $218 a year), residents get expanded services and infrastructure, totalling $4.5 million.
Business rates would increase by up to $1,561 a year and Chatswood Chamber of Commerce president Warwick Andison said he had voiced his dissatisfaction to council.
“We’re all paying almost double what we were paying a couple of years ago in mortgage repayments,” Mr Andison told North Shore Living. “It is affecting local businesses too, because they’re paying extra rents to landlords, and shop owners are paying extra rates. It’s not a good result.”
Mayor Tanya Taylor said the council recognised that some people were facing cost of living problems, but it would continue to ‘cut unnecessary costs and find alternative revenue sources’ to reduce the impact of rate rises.
Member for Willoughby Tim James told North Shore Living that councils needed to be aware of those struggling with cost of living increases. “Whilst rates are a matter for local government, with considerable current cost of living pressures, all (councils) should be working to manage their budgets in a sustainable and responsible manner,” Mr James said.
“Councils need to be particularly sensitive at this time in relation to the vulnerable and those for whom a substantial rate increase is extremely difficult.”
Consultation ends 5 November.