Are you a property or business rate payer in Cumberland City?
As a result of the merger of the three former Council areas (Holroyd, Auburn and part of Parramatta), Council inherited three different rate structures. Due to a four year rates freeze imposed by the State Government, Council could not adjust rates in the first four years after amalgamations which saw different rates being paid in different areas.
As required by law, Cumberland City Council must review the rates structure by 1 July 2021 to align the existing rates of three former rates systems into a single consistent structure and look at options to make sure it stays financially sustainable in the long term.
In order for Council to determine the preferred rates structure for our Local Government Area, a thorough community consultation process will be undertaken to seek your input and feedback on 2 proposals to harmonise rates.
Council is considering two options to harmonise rates
This option sees Council transition to a consistent way of calculating rates for all ratepayers across the LGA, over a five year period, commencing from 1 July 2021, but does not generate any additional income over and above the mandatory rate peg.
Essentially this means a redistribution of the total rates income so that all ratepayers have their rates calculated in the same way. The total rates income remains unchanged and therefore the financial pressures created by an increasing population are not addressed by this option.
Council will adjust rates over 5 years across the whole Local Government Area, starting from 1 July 2021, with an additional special rate variation of 2% on top of the annual rate increase, for the first year only.
This option will allow Council to collect an additional $10 million over the 5 year period to recover income lost as a result of the merger and increase our investment in community infrastructure and facilities to better meet the needs of our growing population.
Whilst the harmonisation of rates is a mandatory requirement, the generation of additional income from rates is optional and largely based on the results of our community consultation.
Both of the options identified above allow Council to harmonise rates. Only Option 2, however, addresses Council’s need to generate additional income required to meet the demands of a growing population.
Council’s preference to harmonise rates over a five year period will require changes to legislation. In the event that these changes are not made, Council will be forced to harmonise rates in one year.
Rates Harmonisation FAQs
What are rates?
Council rates are a property tax and are a source of Council revenue.
Rates are used to provide essential infrastructure and services. This includes footpaths, resealing roads, and stormwater drainage as well as community facilities (parks, gardens, libraries and pools).
What does rates harmonisation mean?
Rates ‘harmonisation’ is a process where Council reviews the existing rates being paid to move to a single system that uses the same method to calculate rates.
Why is Cumberland City Council harmonising rates?
We are required to ‘harmonise’ rates by law.
During the merger process, the State Government imposed a freeze which meant that amalgamated councils could not change the way rates were calculated. This means we have been applying three different rates structures from the councils that were amalgamated into Cumberland (Auburn, Holroyd and parts of Parramatta) and as a result, the way rates are calculated varies.
In July 2021, the freeze will lift and we will be required to ensure we use the same method to calculate rates for every rate payer in our local government area.
When will harmonisation occur?
The Local Government Act 1993 requires that rate harmonisation must commence by July 2021 and we are proposing a single rates structure start from this date.
How much will (my) rates change?
This will depend on where your property is located. Please refer to the infographic that has been developed, which summarises what the changes will mean for you.
What happens if we do nothing about this?
The State Government requires that Council’s harmonise their rates harmonisation, or have a plan in place to move to a single rates structure, by 1 July 2021.
If we do not adopt the current approach of phasing in changes over a 5-year period, Council will need to transition to a single rates structure within a year, meaning rate payers most significantly affected, will experience a 30% increase.
What happens from here?
We are conducting community consultation and we want to hear from rate payers on their preferred option and the impacts associated with each option.
Once community consultation concludes, we will be providing a report outlining the views of the community and recommending the preferred option.
Council will lodge an application with IPART to vary minimum rates and/or the rate cap. If approved by IPART, new rates will take effect from 1 July 2021.
We will keep the community informed of our progress and will provide regular updates.
What options are available to me if I feel the proposed changes will cause me financial pressure?
Council’s existing Rates Hardship Policy will be available to assist rate payers who are eligible for assistance.
Rate payers can also apply to pay their rates using an instalment plan instead of paying them as a lump sum.
How can I find out more?
All rate payers will receive detailed information about the rates harmonisation process and will start receiving letters this month. Council will provide information in its community newsletter as well as its website.
Have your say
Consultation has closed on Council's proposed Rates Harmonisation and submissions are now being reviewed.
Thank you to everyone who provided feedback.
To inform Council’s decision on the preferred option, we want to know what you think. A range of mechanisms have been implemented to allow our community to provide feedback about their preferred option, and to seek further information about the requirement for the proposed changes and the options we have identified to meet these obligations.
There are a number of ways you can get more information and provide your feedback.
- Have Your Say - Have Your Say on proposed changes
- Email Council directly - email@example.com
- Phone Council directly - For more information, session times or to make a submission, please contact us on 02 8757 9000.
If you wish to make a submission, please do so by Wednesday 30 September 2020.