Rate Pegging Constrains Growth - Bega Valley
Continuing an interview with Graeme Faulkner, former Bega Valley Shire Council GM
Q. From a small rate base, Bega Valley Shire Council has a large amount of infrastructure to maintain and administer – roads, bridges, halls, swimming pools, libraries, tips, cemeteries etc. Can council continue to support this amount of infrastructure, particularly with rate pegging?
Council cannot continue to support infrastructure maintenance and renewal to the levels previously expected by ratepayers or Council, under the current rate pegging regime.
Don’t be shy about making your comments in the box below.
There is a need for a review of the rate pegging mechanism such that economic and financial aspects are considered ahead of the political consideration that continues to dominate rate pegging policy.
Q. What specific impact does rate pegging have on the financial sustainability of council?
Unfortunately for NSW, rate pegging has:
- Distorted the fundamental financial equation necessary for infrastructure upkeep.
- Insofar as it has applied across NSW and only in NSW, reduced NSW, comparable to other States, to the “State of Decay”.
- Destroyed decentralised local government which was the antithesis of globalisation forces that facilitate concentration and regionalisation to attain economies of scale. In fundamental terms, decentralised local government facilitated economic financial multipliers in regional areas of the state, permitting the opportunity for innovation in areas that had no other economic support base. Decentralised local government was a proactive pathfinder for regional development in NSW but has now been overtaken by forces reactive to globalisation.
Specifically, rate pegging constrains growth in the revenue base without any comparable constraints in Council’s costs.
