RATES could rise by more than 20 per cent if a proposal by the Independent Pricing and Regulatory Tribunal (IPART) to have Local Government replace insurance agencies in paying the “fire services levy” is realised and another 10 per cent if they are forced into paying payroll tax (see story page 4).

The proposals have been met with resistance by Cootamundra Shire Council, which claims it will be adversely affected.

The fire services levy is a fee imposed on insurance companies to cover the cost of the fire brigade. It is calculated as a percentage of the premium on all property insurance policies, residential and commercial alike.

The IPART report recommended that Local Government take over the levy and increase rates to cover the cost, in effect asking all residents to pick up the fire services bill in their local area.

At their Monday night meeting Councillors questioned whether ratepayers may in effect be asked to pay the levy twice, with no assurances offered that insurance companies would decrease their fees to the same degree as the levy.

According to Council the philosophical position behind the proposal is that all property owners should cover the cost of fire services as all property owners benefit from the services, the cost should not be imposed on those who are insured only.

Council General Manager Ken Trethewey said in a letter to IPART that the levy should be charged by the State, who in fact have total control over the income, expenditure and operation of both the RFS (Rural Fire Service) and NSWFB (New South Wales Fire Brigade).

He stipulated within that if Local Government is asked to collect money on behalf of the State it should be clear to ratepayers that the money is being passed on to the state and is not becoming part of the Council coffers.

Absent from the IPART report is a mention as the whether the vehicle insurance fire service levy will be retained, leading Cootamundra Shire Council to assume it will not be, therefore transferring this liability to ratepayers as land taxes.

In his letter Mr Trethewey assumes the Department of Local Government would be instructed by IPART to allow a rate increase of 20.63 per cent, as well as allow subsequent increases each year in accordance with State allocations to the RFS and NSWFB.

Should this not be the case, Mr Trethewey contends, fire services budgets would increase faster than the rate pegging limit, thus taking money away from other services Council funds within the local area.

“Based on Council’s experience with libraries, pensioner rate rebates and the like, the burden would gradually increase on the ratepayer,” Mr Trethewey said.