Capping rates could cost council $30 million

The council may as well tear their long-term financial plan apart after Liberal leader Steven Marshall announced he will cap council rates rises. 

Chief executive officer Dr Andrew Johnson said it would cost council $30 million or 40 per cent of their capital works plan over the next 10 years.

He said all new programs including the sports stadium, marine infrastructure upgrade, central business district upgrade and stage two of the water use project were now in jeopardy.

But Mr Marshall argued cost of living increases were placing enormous pressure on family budgets and his policy could save  ratepayers thousands of dollars in the next decade. 

Three-quarters of the people questioned on the issue by a journalist from The Recorder on Friday supported rate-rises being capped.  

Port Pirie resident Nick Irvin said he supported it because “there’s been a ridiculous increase”, while Chloe Dodd said rates were “just another tax and they are too high”.

Tammy Harmer on the other hand, said her view would depend on “how it would affect council working for us”.

Dr Johnson said he had calculated the $30 million cost to council based on a capping of three per cent.

He said it would make it hard for the council to catch up with other councils in the state which have much higher rates than Port Pirie.  “Based on my New South Wales experience, what you see is a decline in infrastructure services and a decline in services,” he said.  “Residents have to be aware that based on my NSW experience, it will result in less facilities and deteriorated facilities.”

He said councils in South Australia receive less grant funding than any other state and that he was disappointed because the long-term financial plan was subject to intense public scrutiny.  It will now need to be rewritten.   

Mr Marshall said the rates will be capped from July 2015 in-line with inflation to “ease the pain and get household budgets back under control”.

“If council rates in South Australia grew at 4.4 per cent per year over the next decade,  instead of the 6.8 per cent they increased by over the last decade, a household paying  $1000 in annual rates today will save $1891,” he said.

Local Government Association of South Australia acting president Lorraine Rosenberg, said she met with Mr Marshall last week.   

“The biggest negative impact of this policy, if applied in the same way as NSW, will be to cripple some councils’ capacity to respond to local needs,” she said.

“We are concerned that this rate capping proposal will put at risk the welcomed announcements by the Opposition regarding the $50 million economic stimulus program and its $15 million regional development program.”

Port Pirie Regional Council are concerned that a plan by Liberal Leader Steven Marshall to cap council rates could cost them $30m

Port Pirie Regional Council are concerned that a plan by Liberal Leader Steven Marshall to cap council rates could cost them $30m

This story Capping rates could cost council $30 million first appeared on The Recorder.

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