Special Rate Variation

At Kempsey Shire Council, we lead and work with our community to build an inspired, connected Macleay Valley, by fostering sustainable growth, enhancing community services, and maintaining the high quality of life our residents cherish.

To achieve these goals, we rely on various funding mechanisms including rates.

Since 1977 Council rate revenue and certain other Council revenues have been regulated in NSW under an arrangement known as 'rate pegging'.

Each year the NSW Government, through its rate-pegging policy, determines the percentage figure by which councils can increase their general rate income.

If councils want to apply for a larger increase they need to make a Special Rate Variation application.

Is Council requesting a Special Rate Variation?

Council is investigating whether to apply for a Special Rate Variation.

At the April 2023 ordinary meeting, Councillors voted to:

  1. Conduct a detailed investigation into options for achieving financial sustainability. This will include a review of asset management plans, proposed capital programs, possible service level reductions, assessing capacity to pay and conducting community engagement; and
  2. Receive a report in November 2023 recommending whether a Special Rate Variation application should be submitted with the intention of implementing a rate increase from the 2024-25 financial year. This will include consideration of the viability of service reductions.

The November report will consider three options for possible rate increases staggered over three years between 2024 and 2026, ranging from 51% to 94% which are necessary to secure our community's financial future.

Council faces significant financial challenges to meet community expectations over the next 10 years with current estimates forecasting a deficit totalling $103 million. This is despite a five year financial sustainability program focused on efficiencies and reduced costs.

Many factors have contributed to making Council’s financial position unsustainable, including rising costs and interest rates, NSW Government rate pegging failing to keep up with inflation and community expectation that assets like roads, bridges and community facilities should be maintained and improved on current levels.