Liberals propose a cap on council rate rises

CAP: The state Liberal party's announcement to put a cap on council rate rises has received mixed reviews.

CAP: The state Liberal party's announcement to put a cap on council rate rises has received mixed reviews.

The state Liberal party have announced that if voted into government in the March election, a cap on council rate rises will be imposed to help ease the cost of living for South Australians. 

The controversial announcement has received extremely varied reactions among councils, ratepayers and other bodies throughout the state. 

State Liberal leader Steven Marshall said cost of living pressures are currently placing enormous pressure on family budgets, and the capping would help end the ever-increasing rate rises. 

“Council rates in South Australia increased by an average of 6.8 per cent per year between 2002/03 and 2011/12 - more than double the rate of inflation and 2.4 percentage points more than New South Wales which has a cap in place,” Mr Marshall said. 

Mr Marshall said if council rates rose at an annual lower rate of 4.4 per cent, a household paying $1000 in annual rates would save $1,891 over a ten year period. 

“We need to reform how council rates in South Australia are imposed to ensure that households are receiving value for money and councils are delivering their services at the best possible price,” he said. 

The capping would begin on July 1, 2015, and would be controlled by independent authority Essential Services Commission of South Australia (ESCOSA), based on a local government cost index. 

A state Labor representative confirmed the government is opposed to the idea of capping council rates. 

“I can’t see this saving one single dollar for any South Australian,” SA premier Jay Weatherill said.

The Local Government Association (LGA) has also rejected the idea, suggesting it would cause financial stress to councils with a resulting reduction in service and service delivery to communities. 

LGA acting president may Lorraine Rosenberg said councils are careful managers of public money raised through rates and the scrutiny on councils to be good managers was much higher than on other spheres of government. 

“Councils consider community requirements, the need for new infrastructure, the need to upgrade and maintain existing infrastructure and then we consult extensively with our communities before a rate is decided for the following year,” mayor Rosenberg said. 

“Under the Liberal plan these and other services will have to be looked at very closely and traditional services may need to be offset by new infrastructure required by communities, especially those facing growth.

“Naturally our communities will be swayed by the prospect of a lower rate bill but what they are not going to see is the end cost to community services and service delivery.”

Mr Marshall attended an urgent meeting called by the LGA on February 27, but remained firm about his intentions to impose the cap if he becomes Premier next month.