Penrith Council has defended its proposal to implement a 2.6 per cent rate rise for 2020-21 during the Coronavirus pandemic.
In an exclusive interview with the Weekender, Mayor Ross Fowler highlighted the ramifications that would flow if Council fails to apply the standard 2.6 per cent rate rise set by the Independent Pricing and Regulatory Tribunal.
“One of the suggestions was ‘don’t do it this year and catch up next year’, but you can’t catch up, once you’ve forgone it, that’s it,” he said.
“So you’re that percentage behind your costs in perpetuity because you’ll never get the 2.6 per cent back unless you have a special rates variation.”
Cr Fowler said not implementing the rate peg would mean a reduction in Council services, and putting projects on the back-burner was not a viable option either as employees banking on the jobs would suffer.
“And I think the whole purpose of the government and stimulus is to create work opportunities, and Council’s capital program, which is, from recollection, about $300 million over the next few years, is part of that stimulus program,” he said.
He also justified Council’s decision to keep its current rating system, which has come under fire from rural ratepayers who want a base rate to provide a fairer spread.
Council currently applies an ‘ad volorem with a minimum amount’ rate structure, which means rates are predominantly based on the land value of the property as determined by the NSW Valuer-General every three years.
“There’s no more equitable way to do it than the system we have got now, given the methodology we’re allowed to use by the State Government,” Cr Fowler said.
He said implementing a base rate would hurt a “significant number” of Council’s 76,000 ratepayers, with about 20,000 property owners, 4,000 of whom are pensioners, being negatively impacted.
Council has written to the State Government seeking the deferral of new land valuations, which are due to come into effect on July 1.
It also requested a more realistic increase to the pensioner rebate, currently capped at $250.
Existing hardship provisions have also been strengthened, with Council temporarily waiving any interest charges on outstanding rates in the wake of COVID-19.
“It’s a difficult task, rates,” Cr Fowler said.
“We’re more or less the servants in the exercise, not the masters.”
Council’s draft 2020-21 Operational Plan is currently on public exhibition until June 1.
Alena Higgins is the Weekender’s Senior News Reporter, primarily covering courts and Council issues.