Rates rises should be capped at a maximum of CPI

The Property Council of Australia has told local government that if rate increases are set at anything above the Consumer Price Index of 1.3 per cent, the community will rightfully need to know why, when there is significant restraint elsewhere.

Tasmanian Executive Director Brian Wightman said the fact that CPI decreased by 0.2 per cent in the March quarter should send a strong indication to the local government sector.

“Why is everybody else in the community keeping costs down, but local government sets their own bar at 1.87 per cent, which is almost one third above the CPI figure for Hobart?

“The 0.2 per cent decline in the Consumer Price Index was the first decrease in Hobart since June 2012.

“A  1.3 per cent increase in the CPI should be the maximum basis for setting rate increases.

“However, unfortunately local government has set their Council Cost Index at 1.87 per cent which remains higher than CPI,” he said. 

The Property Council of Australia questioned the equity of the approach, particularly in Hobart where much talked about resource sharing and a construction boom should have delivered savings and increased revenue.

“Councils in the greater Hobart area are profiting from improved confidence and significant private investment.

“And when you couple that with the resource sharing which is apparently occurring, there is no justification to increase rates more than the CPI,” Mr Wightman said.