The rate peg or the percentage specified in a special variation is the maximum amount by which a council can increase its general income in a particular year. It is open to a council to increase its general income by less than the rate peg or the percentage specified in a special variation.
Where a council does not apply the full percentage increase available to it, section 511 of the Local Government Act 1993 permits the council to catch up on the shortfall in general income over any one or more of the next 10 years. It is a matter for each Council to decide how it spreads this catch up over that period.
There are other provisions of the Local Government Act 1993 that may have implications for councils proposing to catch up on a shortfall in general income - for instance, section 548 which limits the minimum amount of a rate to an amount prescribed by regulations or specified by IPART (as the Minister’s delegate).
As each Council’s individual circumstances may differ, we encourage councils that are considering using the ‘catch-up’ provisions to seek legal advice where necessary. We also encourage councils to consult with ratepayers.
There is further information on the ‘catch up’ provisions in the Council Rating and Revenue Raising Manual published by OLG.
The Council Portal is the place for NSW councils to submit special variation notification letters, special variation and minimum rate applications, lodge s94 contributions plans for review and find the latest information about the Local Government Cost Index and cost index surveys.