Council merger talk reignites amid rate hikes of up to $526 a year

Twenty-two NSW councils will hit residential ratepayers with price rises next financial year ranging from less than $1 a week to $3.33 a week. The rises reflect the dire financial position of many councils which often operate at a loss and struggle to pay for basic services such as road repair and rubbish collection.

Wollondilly Shire Council, on Sydney's south-west fringe, was granted the largest cumulative increase by the Independent Pricing and Regulatory Tribunal. By 2018-19 the average resident will be slugged an extra $10.13 a week, or more than $526 a year.

The councils applied to charge residents more than the "rate peg" – the maximum allowable increase on annual rates. They include Mosman, Ashfield, Willoughby, Ryde, Marrickville, Ballina, Blue Mountains, Gloucester, Shoalhaven, Newcastle and Coffs Harbour.

IPART chairman Peter Boxall said the councils demonstrated a need for more revenue, that they were acting to improve their financial positions and had consulted residents.

"We expect that councils have listened to their communities and considered their capacity and willingness to pay prior to applying to IPART," he said.

The state government is pushing ahead with its Fit For the Future program to reduce the number of Sydney councils from 41 to as low as 15, claiming the current system is unsustainable.

Local Government Minister Paul Toole said on Tuesday ratepayers had a right to question if Sydney could afford so many separate council administrations, adding the government's reforms would put downward pressure on rates.

"Councils have told IPART that without significant rate increases they would be not be able to provide essential services and reduce their infrastructure backlogs," he said. "This is not viable in the long-term."

The government has not ruled out forced amalgamations. A survey by Fairfax Media this month found only two Sydney councils favoured amalgamation. Some were undecided and most were adamantly opposed.