North East mayors raise concerns about application of new rates cap on budgets in 2022-23

The Garden State's Local Government Minister Shaun Leane announced the amount on Wednesday as part of its annual review and application of rate capping, which began in 2016.

The cap this financial year is 1.5 per cent, the lowest on record, following tallies of 2.25, 2.5 and 2.0 in the previous periods.

Mayors of Indigo, Towong and Alpine councils all indicated it would be tough to meet the 1.75 and maintain services and spending.

Indigo's leader Bernard Gaffney said ballooning project costs were a concern.

"Tenders for infrastructure are coming in much higher than expected because of a shortage of labour which means higher wages and in particular there is a shortage of materials which is inflating the costs to council," he said.

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"So this cap increase, albeit small, will not cover the costs."

Cr Gaffney said his council had committed to not seeking a cap exemption.

Towong mayor Andrew Whitehead said his council would discuss an exemption, which the shire has had, although not in the past two years after state relief tied to the Black Summer bushfires.

"It's definitely going to be a challenge for small rural councils like Towong at 1.75," he said.

"We don't think the ratepayers should be paying anything more than that but how we stay sustainable is a bit of a worry."

Alpine mayor Sarah Nicholas said, like Towong, her council tried to keep rates low, but had high expenses given its relatively small population.

She said it was good the minister had recognised recovery needs linked to COVID and the bushfires but noted the higher caps applied previously.

In NSW, a new system of rate capping has been introduced for 2022-23 which has resulted in different figures applied to councils based on population growth.

Albury will have a 1.1 per cent ceiling and Federation 1.6, Berrigan 0.9 and Greater Hume 0.7.

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