Newcastle rate rise snares $7.88m

NEWCASTLE homeowners and businesses will tip an additional $7.88million into council coffers next year, after the state’s pricing watchdog granted the city an 8.6per cent increase to land rates.

The average residential rates bill will jump from $939 to $1020 a year – an increase of about $81.

The increase, which is 5per cent above the rate cap, is expected to raise Newcastle City Council about $44.6million over the next 10 years, and the extra income will be put towards six of the council’s nine priority projects, including upgrades to city cycleways, libraries, the art gallery and Blackbutt Reserve.

Council city assets director Steve Edmonds said yesterday detailed planning and preparation work on those projects could begin immediately, but it might be ‘‘two or three years’’ before residents would see bricks-and-mortar results.

Heavier rates notices will begin arriving in letterboxes across the city from July 1.

The initial cash flow will, on paper, almost wipe out the council’s predicted $8.4million budget deficit in 2012-13.

But Mr Edmonds acknowledged that was due to money being collected before projects were ready to start, and that the council would still need to address underlying problems caused by increasing costs that were outpacing income.

‘‘The underlying operating deficit is a ... factor we need to address, as is the infrastructure backlog,’’ Mr Edmonds said.

Reaction to yesterday’s decision has also set the scene for a council election campaign fought between advocates of the rates increase and those who opposed the move in favour of austere measures such as cutting costs and services.

Labor councillor Nuatali Nelmes welcomed the funding for new projects, while Liberal Brad Luke blasted his council colleagues as ‘‘financially illiterate’’.

Cr Nelmes said she would always support investment in facilities, particularly projects such as the upgrades at Blackbutt.

‘‘If you don’t invest in council building and infrastructure work, particularly in times that are difficult, you end up with nothing left,’’ Cr Nelmes said.

Cr Luke said the increase was only needed because councillors couldn’t get their expenditure in check and ‘‘all want to build monuments to themselves’’.

‘‘The election coming up absolutely will be about the economic management of the city into the future.’’

Lord mayor John Tate expressed his concern that a newly-elected council could choose to scrap plans the identified projects.

‘‘There’s no ironclad guarantee that these proposals will be delivered on time or on budget,’’ Cr Tate said.

Mr Edmonds said the NSW government would be responsible for monitoring the council’s spending, and that a condition of the rates increase was that the council must report on its progress in annual reports for the next 10 years.

Independent Pricing and Regulatory Tribunal chairman Peter Boxall said the council had met all required criteria.

WHAT IT MEANS FOR NEWCASTLE

2011-12 rates (annual) 2012-13 rates (annual)

$600 rate notice will rise to $651.60

$800 rate notice will rise to $868.80

$1000 rate notice will rise to $1086

$1200 rate notice will rise to $1303.20

$1500 rate notice will rise to $1629

$2000 rate notice will rise to $2172

$3000 rate notice will rise to $3258

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