Forbes Shire Council seeks 2.5 per cent rate rise, more in federal assistance grants

WE'D HAVE TO CUT SERVICES: Forbes Shire Council will apply to IPART to raise rates revenue by 2.5 per cent. Picture: FILE
WE'D HAVE TO CUT SERVICES: Forbes Shire Council will apply to IPART to raise rates revenue by 2.5 per cent. Picture: FILE

Forbes Shire Council will appeal to raise rates by 2.5 per cent this coming financial year - rather than the 0.7 per cent limit placed on our council by IPART - and in future.

Councillors heard services would have to be cut if the council could only increase its rates revenue by 0.7 per cent in the 2022/2023 financial year.

There would be a shortfall of $142,200 compared to the council's projections and budget, a report to the March council meeting said.

Councillors voted to apply for a permanent "special variation" to IPART's decision, setting a consistent rate rise for the future as well.

"Forbes Shire Council, along with all councils in NSW was shocked to hear that the rate peg for the 2022/23 financial year was set at 0.7 per cent, significantly lower than previous years and the current rate of inflation of 3.5 per cent," the report from Director Corporate Services Stefan Murru said.

"Council originally budgeted for a 2.5 per cent rate peg increase for the 2022/23 financial year in its Delivery Program and Long Term Financial Plan (LTFP).

"This ridiculously low rate peg combined with cost shifting by other levels of government and the shock of COVID, natural disasters, and increased regulatory burden all mean that rural councils are once again forced to cut back on essential services to our communities."

The council had forecast total rates revenue of $8.098 million for the year, up from $7.900 million in 2021 / 2022.

Deputy Mayor Chris Roylance said there would still be an issue.

"If we have a rate rise of 2.5 and we've got everything going up 20 per cent, it's a recipe for disaster really," he said.

"We've got everything going up way past 2.5.

"There's an issue here. A major problem for all councils, not just us."

Mayor Phyllis Miller OAM also asked for councillors' support to call on the Federal Government to increase Federal Assistance Grants to one per cent of Commonwealth tax revenue - where they were in 1996.

"The relative decline of FAGs grants over the last 20 years (a 43 per cent decline) coupled with increased cost shifting (for example the recent Emergency Services Levy increases) and rate pegging has meant that many rural councils are struggling to provide the services their communities require," a mayoral minute to the March council meeting said.

"Over recent years rural councils have suffered through floods, drought, Covid-19, supply chain constraints, and increased costs associated with providing the services our residents need.

"Local government is the level of government closest to the people, and rural councils are often highly reliant on grant funding to support their communities.

"This relative reduction in FAGs grants over time seriously impacts the financial viability of smaller rural councils who are highly reliant on grant funding for their financial survival."