There may be a price to pay for rate capping

THE decision by the Tumby Bay and Lower Eyre Peninsula district councils and the Port Lincoln City Council to oppose the state government’s rate capping bill probably does not come as much of a surprise.

When councils are determining budgets and business plans, and putting their rate rises to the community it is pretty common to hear people cry out for lower rates.

While capping rates would help ease the seemingly ever increasing cost of living on rate payers, there may well be another price to pay.

It is a real possibility that the introduction of rate capping in South Australia could restrict council service delivery, cause infrastructure decay and result in higher charges for taxpayers.

Councils have gone well beyond fixing up roads and collecting rubbish, the Port Lincoln City Council – for example – operates the visitor information centre and the library and rate capping could have an affect on these services.

In today’s front page story on the topic, each council raised different concerns with the state government’s Rate Capping Bill and all of them were valid.

It is worth keeping in mind that the council is not immune to the increasing costs ratepayers are so sick of.

Councils still have bills and staff to pay but they also have things like waste management levies to pay to the state government.

Maybe local government might be fonder of rate capping if the state government agrees to cap its levies. 

It is hard not to be skeptical about claims a rate cap will save money because at the end of the day ratepayers are also taxpayers to the state and federal government.

Whatever the answer may be, it does not seem like local councils are going to go for this “blanket” policy approach.

Perhaps something that tailors to the size, population, financial position and service delivery requirements of individual councils might be better received.

The reality of a rate cap is that councils will have to make more hard decisions about what projects and services to maintain and upgrade and that could affect ratepayers in ways they may not be expecting.

Saving money might be the order of the day today but it is worth remembering that local communities will only get what they pay for.