IPART is responsible for setting the rate peg for NSW councils each year.
Rate Peg - 2016-17
The Rate Peg to apply in the 2016/17 financial year will be 1.8%. For more information, see our Media Release and Fact Sheet.
WHAT IS THE RATE PEG?
The rate peg determines the maximum percentage amount by which a council may increase its general income for the year. For almost all councils, general income consists entirely of rates income. For a small number of councils, general income also includes some annual charges such as drainage levies. The rate peg does not apply to stormwater, waste collection, water and sewerage charges.
Under the Local Government Act, councils are able to seek additional increases in general income beyond the annual rate peg, by applying to IPART for a 'special rate variation'.
HOW DID WE SET THE RATE PEG FOR 2016-17?
The rate peg is mainly based on the Local Government Cost Index (LGCI), which measures price changes over the past year for goods, materials and labour used by an average council. We consider a productivity adjustment to the LGCI. This enables a balance between ensuring that councils can meet the increased costs of delivering services resulting from price changes and ensuring that councils share productivity gains with ratepayers.
We calculated the rate peg for 2016-17 by:
- applying the increase in the LGCI for the year to September 2016 of 1.78%
- with no adjustment to the index in regard to productivity
This resulted in a rate peg of 1.78% which we rounded to 1.8% for 2016-17.
Local Government Cost Index
The Local Government Cost Index was developed by IPART, following a survey of councils by IPART in 2010. For more information on the Local Government Cost Index click here.
Enquiries regarding income setting and the annual rate peg may be directed to:
Tony Camenzuli at Tony_Camenzuli@ipart.nsw.gov.au or by telephone (02) 9113 7706