Rate Capping

You may have heard talk about ‘Rate Capping’, or the capping of Council Rates which the Government has introduced into Parliament as the Rate Oversight Bill.

The Bill basically gives the responsibility of setting an annual rate increase in Council rates to an external agency (ESCOSA – the Essential Services Commission of SA), at the direction of the Minister.  This will add another cost to be paid for by ratepayers, as the cost for ESCOSA to administer the system will be paid for by Councils (ratepayers).

This process will not ‘cap’ each rate payers rates, but ‘cap’ the increase in total rate revenue that each Council can raise, therefore there would still be individual rates that could significantly vary from this.  What it also does is limit Councils ability to respond to the needs of each community.  For example West Torrens has to fund its part of the Flooding mitigation work of the Keswick Brownhill Creeks of $23 million over the next 15 years.  A variation for this kind of project can be applied for, but again as a huge administrative cost to ratepayers – interstate the cost of these applications can be over $100,000

I personally believe that there are many cost savings and efficiencies to be made in the Local Government sector, however I see this the responsibility of your elected representatives to drive the strategic focus of Council Administration to delivering more for less, efficiency and eliminating unnecessary processes and waste that exist within the administration of the city. Every budget item I’m always questioning the spending of every dollar and if there is a way we can do things more efficiently.

While this year our rates went up by 2.3% on average- lower than the Adelaide inflation rate of 2.7%, I believe there is room for lower increases without a reduction in services provided. While rate capping could hopefully promote spending restraint, efficiency, cut waste and get priorities right, it could also restrict Council’s ability to maintain our community assets to the standards our residents expect. We also need the State Government to commit to no more cost shifting from the State Government like NRM levy and landfill levy which have gone up considerably over recent years.