HUNTER councils have won approval to lift their rates by more than the statewide cap in the coming financial year, reaping millions more for their budgets.
The Independent Pricing and Regulatory Tribunal (IPART) on Monday released its decisions on applications for councils to charge ratepayers more than the pre-set cap.
Cessnock receives a 2.5 per cent rise, 1.8 per cent in addition to the 0.7 per cent rate peg. That matches the change permitted for Lake Macquarie, Muswellbrook, City of Newcastle.
Singleton and Upper Hunter shires will receive 2 per cent rises above the same cap.
Among the Hunter bids, only the Lake Macquarie application received a submission, which remains confidential.
In its decision IPART noted Newcastle's raise, which it said was already factored into the council's budget was permanent. That means the rise will be factored into the base from which future rises are calculateed.
"We estimate this to be around $2.21 million in additional income in 2022-23 which [it] can keep in its rate base going forward," the regulator wrote.
"This allows the council an extra $11.6 million over the next five years."
In a unanimous council resolution to seek the higher rate rise, Lake Macquarie councillors said they expected to reap an extra $2.7 million next fiscal year and $30 million over the next decade.
Writing to IPART in April, City of Newcastle chief executive Jeremy Bath said the extra funds would be used to offset COVID-19's financial blow.
"Supporting the local economy throughout the pandemic has helped limit the full force of the economic impact of restrictions implemented to limit the spread of COVID-19 during the first 18 months of the pandemic," he said.
"However, the resulting lost revenue and increased expenditure experienced during the three affected financial years makes it critical City of Newcastle's rate revenue grows by the proposed 2.5 per cent to help offset the pressure creating by surging inflation, both in 2021 and this year.
"Without the additional rate revenue possible under a rate cap of 2.5 per cent, CN will have no choice but to consider reductions in service or postponement of proposed projects ... to ensure future delivery of balanced budgets."
Midcoast will get a 2.25 per cent rise, above the 0.9 per cent cap that applied, while Port Stephens' 2.5 per cent is above a cap of 1.3 per cent.
The Hunter councils were among 86 approved to exceed the benchmark rate peg, which is designed to cap the level at which rates rise in a single year.
"The latest rate peg was determined in the low inflation environment at the beginning of the COVID-19 pandemic," tribunal member Deborah Cope said.
"Since then, high inflation and global uncertainty increased councils' costs. Some councils have demonstrated that without additional funds they will not be able to deliver the projects they have already consulted on and included in their budgets."
IPART noted the most recent rate peg was lower than councils had expected, and that it was reviewing how the rate peg is set "to deal with volatility in economic conditions".
"We were careful to balance the need of councils to maintain the services and investment they had already committed to against the need to keep rates affordable for the community," Ms Cope said.
