THE pockets of home and business owners in Newcastle will be significantly lighter from July 1 with the state’s independent pricing watchdog approving a 46.9per cent rise to council rates.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The move means the average residential rate in Newcastle will rise by $504 a year by 2019 with the city’s business rate soaring by more than $4000 annually over the same period. In all, it will deliver almost $300million in additional funds to Newcastle council’s coffers over the next decade.
The Independent Pricing and Regulatory Tribunal approved the application on Tuesday, ruling that Newcastle council had essentially been able to prove that it needed the money. While it’s not good news for those struggling to meet rising living costs, the council said it was good news for its bottom line and the host of projects it can now fund.
At the top of the council’s shopping list is the revitalisation of Hunter Street, the completion of work on the ambitious Bather’s Way coastal walk and further improvements to Blackbutt Reserve. All of these projects were earmarked for funding when IPART approved the council’s last significant rate rise in 2011, but they were never completed and some didn’t even get off the ground.
Also earmarked for funding under this latest increase is a multimillion-dollar commitment to bike lanes and cycle paths, the restoration of City Hall, new footpaths and roads.
The council surprised many last November when it agreed to seek the 46.9per cent increase despite being widely tipped to seek just a 37.5per cent rise. The latter was supported by the majority of residents and business owners who were surveyed, but the council voted for the bigger rise which was proposed by Greens councillors and approved on the casting vote of lord mayor Nuatali Nelmes.
‘‘The IPART decision supports our current draft budget which proposes to double spending on fixing and upgrading basic essential infrastructure for our community such as roads, footpaths, parks and playgrounds,’’ Cr Nelmes said.
‘‘These projects will go ahead without depleting our cash reserves and ensure council’s long-term financial sustainability.
‘‘This means future generations can enjoy quality community infrastructure and a vibrant, attractive and well-maintained city that we deserve.’’
The council’s general manager Ken Gouldthorp said the approval would pull the council back from financial oblivion and allow it to address its backlog of infrastructure works.
IPART chairman Peter Boxall said Newcastle’s application was considered ‘‘reasonable’’.
“While these increases will impact the community, Newcastle City Council was able to meet the criteria ... by demonstrating a clear need for the additional revenue, that it had appropriately engaged the community about the proposed rate increases, and that it has taken and is taking steps to improve productivity and contain costs,’’ Mr Boxall said.
“The council was able to demonstrate that it has considered the impact of the increases on ratepayers and it has concluded that, overall, its ratepayers have the capacity to pay the proposed rate increases,” he said.
Hunter Business Chamber President Ross Taggart said:
‘‘If you are in business it is really going to make it hard.’’
He said the business chamber and the majority of the community supported the option of a smaller increase during community consultation.
‘‘When businesses are weighing up their options rates form a part of their overheads and they make them look at other options to reduce costs,’’ he said.
‘‘If they can’t pass those costs onto their customers then they may need to decide if they want to make less or move elsewhere.’’
The first rise of 8per cent will take effect from July 1 this year.
This article first appeared on The Herald website.