The two who usually sit at opposite ends of the political spectrum, are opposed to Port Stephens Council’s decision at last Tuesday night’s meeting, to begin the process of seeking a rate rise beyond the state capped limit.

The move would involve the council making its case before the Independent Pricing and Regulatory Tribunal (IPART) for a ‘special rate variation’ with a formal application made by February 2019 and an IPART determination expected the following May – after an ‘extensive community consultation process’ by the council. Only Cr Arnott voted against the move of which he said ‘people simply could not afford’.

Also read: Council’s $404 million wishlist 

According to Mayor Ryan Palmer, the special rate variation would allow the council to invest in the area’s CBDs, among other projects.

“The projects we are proposing [to fund with a rate increase] will generate business growth, higher visitor numbers, busier town centres, jobs growth and greater consumer confidence,” he said.

The Examiner has previously reported that the council would put $25 million into improving town centres across the area to match state funds it is seeking. The council has said its proposed $25 million would partly come from a future rate rise. The figure was part of a wishlist of $404 million in projects the council is seeking funding commitments for in the run-up to the 2019 state election. 

“I should say that I think the projects that have been outlined to [benefit from the rate rise] are all really, really good projects but it’s just that people can’t afford it,” Cr Arnott said.

“The average ratepayer in Port Stephens pays $1000 in rates a year. Electricity prices are rising, the cost of groceries is rising, I’d say the possibility of interests rates rising is very likely.”

Also read: State government’s budget winners and losers

His concerns were echoed by former mayor Bruce MacKenzie who said any rate rise would be unjustified given the current elected council had ‘barely spent 12 months together’ before asking for more money from ratepayers.

“They’ve come in with these grandiose ideas. They haven’t got a clue,” he said.

“People are on minimum wage, the cost of electricity is going through the roof and then if interest rates rise and council rates rise, you’ll have people losing their homes. They go hand in hand.”

Cr Palmer labelled the move as a ‘game changer’ for Port Stephens and worth the additional cost to ratepayers.

“Affordability for residents of Port Stephens is a primary concern in any special rate variation proposal,” Cr Palmer said.

“But I think it is worth remembering a couple of things. Firstly, Port Stephens has very low rates and the smallest default rate in the region. 

“Secondly, when your electricity prices or health insurance premiums go up, you don’t receive any increase in service. What we are advocating for, however, is a massive increase in infrastructure and income generating projects. This will be a game changing moment in the history of Port Stephens.”

The mayor would not be drawn on what percentage rates would increase by under the proposal but said that ‘the community [would] be presented with a range of options and they will have a major say in any application that is submitted to the state government’.

Mr MacKenzie said that even a rate rise of seven per cent, compounded, would see ratepayers pushed to the brink.

“Even if you were paying rates of $400 per year, with a seven per cent compound interest rise, you’d be paying nearly $700 by the eighth year.

“Wages aren’t going up enough to pay for that.”

A public exhibition for the proposal has been earmarked to begin on Monday, July 23 to Friday, August 24 with an ‘extensive community consultation process’ planned.

Also read: Tomaree coastal walk to get $6.7 million upgrade

The mayor said he was confident that he could secure community support for the proposal.

“If they take the time to hear about the projects we want to deliver, I’m confident they will,” he said. “Not only do we charge the lowest rates in the Lower Hunter, but what we are seeking to deliver will provide local jobs, stimulate the local economy, drive business growth and enhance town centres for the benefit of all.”

Though Cr Arnott said the feedback he had received from residents so far had been to the contrary with many concerned that it would place additional financial pressure on households.

“I put it on my Facebook page and the feedback I was getting was that people are ‘struggling enough this will push us closer to the brink’, ‘I’m on a pension and am struggling to pay rates now’”, he said.

“People are going to be shocked by it.”

According to council papers, applications for a special rate variation (SRV) are assessed under five criteria; demonstrated financial need for and purpose of the SRV; demonstrated community awareness and engagement; reasonable impact on ratepayers; integrated planning and reporting documents publicly exhibited and adopted by Council; clear productivity improvements and cost containment strategies.