Council rate capping

If elected in March 2018 a Marshall Liberal Government will establish a Local Government Rate Capping Scheme.

Cost of Living Pressures

The rising cost of living is putting undue pressure on South Australian households and businesses.

Council rates are one of the biggest taxes home owners pay on an annual basis.

In recent years, council rates have increased well above inflation. In some council areas, rates have risen by three times the CPI.

In New South Wales, there has been an effective rate capping regime in place since 1977.

For over 40 years, New South Wales council rates have been overseen by an independent regulator. That state has the lowest council rates in the nation.

South Australians shouldn’t be paying bigger council rate increases than east coast ratepayers.

At every level of government, there is a duty to ensure service delivery is as efficient and effective as possible to contain costs to taxpayers and ratepayers and ease cost of living pressures.

The State Liberals' Plan

If elected in March 2018 a Marshall Liberal Government will establish a Local Government Rate Capping Scheme.

The Scheme will be administered by an independent regulator.

The regulator will determine a rate cap on a region by region basis, recognising that council costs can vary between regions.

The regulator will apply the Local Government Price Index (LGPI) as the basis for determining a rate cap.

The LGPI is compiled from various data sources including the Consumer Price Index (CPI), the Producer Price Index, Wage Price Index and local government expenditure data sourced from the South Australian Local Government Grants Commission.

On average, this results in an LGPI slightly higher than the CPI.

Individual councils will be able to apply to the independent regulator for a rate increase above the cap when able to demonstrate the support of ratepayers.

Cases in which variations could be sought include:

  • funding of projects of regional significance
  • servicing higher population and industry growth areas
  • funding the maintenance or development of essential community infrastructure, including any backlogs
  • funding enhanced or new services to meet growing community demand

Councils will also be able to seek recognition as a ‘Growth Area’ for a maximum of up to five years to support an application for an above rate cap increase.

Five years after its introduction, a Liberal Government will review the Rate Capping Scheme in consultation with local government.

There has been wide community consultation in the development of this policy, including with the Local Government Association, local communities and ratepayers.

During that consultation, the Liberal Party has recognised that over recent years there has been cost-shifting from State to Local Government which has imposed an unfair burden on ratepayers.

A Liberal Government will not continue Labor’s cost-shifting to local councils.