12 June 2026
North Sydney Council has finally got its rate rise, only a year after IPART delivered a fairly blunt rejection of its previous attempt.
Last year Council asked for a thumping 87.05% special variation over two years. It wanted 45% in the first year and another 29% in the second. IPART knocked it back and rejected the proposed minimum rate increases as well.
That was not a near miss. IPART found Council had failed four of the six criteria. It said the purpose of the rise was unclear, the community had not been properly made aware of what was being asked, the impact on ratepayers had not been shown to be reasonable and the productivity case was weak.
A year later Council came back with a smaller, slower and tidier proposal. This time IPART said yes.
The approved increase is still large: 52.66% over three years, made up of 23% in 2026-27, 14.58% in 2027-28 and 8.32% in 2028-29. Minimum rates will rise from $743.85 to $1,216.79 over the same period.
Council clearly learnt from last year’s defeat. It cut the headline number, stretched the pain over three years and did a better job tying the money to infrastructure renewal, backlog reduction, corporate systems and future co-funding of projects.
It also learnt how to talk to IPART.
That is the odd part of the decision. The 2026 application was better than the 2025 application. But better is not the same as convincing. A regulator that was scathing last year has now approved a very large permanent rate increase on the basis of a case that still leaves some obvious questions hanging.
Start with consultation.
IPART found Council had made the community aware of the need for and extent of the increase. Yet IPART’s own feedback process produced 1047 responses, of which 893 opposed the special variation. Only 77 supported it outright. That is not a difficult result to read.
The Sun’s count of the published non-confidential submissions found much the same thing: about 84% were opposed or strongly critical, 13% were clearly supportive and 3% were mixed or unclear.
This was not a referendum. IPART does not have to block a rate rise because residents object. But opposition on that scale should not be treated as mere background noise. It suggests Council may have informed the community. It did not persuade it.
Resident Sarah Kok’s submission went directly to this problem. She argued the proposal lacked the level of evidence and justification reasonably expected for a rate rise of this size and said it should be rejected or substantially reduced. On consultation, she said Council had not provided the information needed for “a complete understanding or awareness” of the proposal, including adequate detail on the rate-peg scenario.
Kok also challenged Council’s use of survey evidence, saying claims that a majority wanted service improvement were overstated. She said the surveys showed most residents preferred maintaining services, while only a minority supported improvement: 23% in the telephone survey and 14% in the opt-in survey. Phase 2, when the proposed rate impacts were clearer, showed minority support for the 52.66% SV: 22% in the telephone survey and 20% in the opt-in survey.
Nor were the objections simply anti-rate-rise slogans. Lavender Bay Precinct attacked the structure of the application, arguing Council had overstated its financial need, failed to properly explain reserves and inflated the infrastructure backlog. Its central criticism was that the $157m backlog figure was heavily affected by a change in methodology. In its view, a more conventional sector approach would put the backlog closer to $46m.
Kok also argued Council had not shown how SV renewal funds would be distributed across specific assets and said the case for banking funds for future undefined projects was “unconvincing” where Council was claiming urgent renewal needs.
That is a material issue. If the infrastructure backlog is the main exhibit in the case for a permanent rate rise, the way it is measured matters. If reserves are being built for future works, the community is entitled to know what those works are, when they will occur and why they should be funded through a permanent rise now.
Resident Chris Bowdler’s submission made the wider point in plainer terms. “Council has not run with the spirit of findings and recommendations in last year’s IPART report,” he said. “Council has not clearly answered questions raised or complied with IPART’s requests.”
Bowdler argued Council had overstated financial need, that its financial resilience was “greater than presented” and that it was “continuing to create relatively large reserves whose make-up is not disclosed and not discussed with the community.” He also said alternatives to the preferred option were not adequately explored.
Cr James Spenceley attacked the same problem from another angle. He said Council had taken “a backward step in its approach and transparency on community consultation” and had used survey questions “to lead answers rather than seek genuine guidance”.
He said the result reinforced the view that Council had “started with an outcome and is retrofitting the answer and community support to that outcome”.
Spenceley’s critique of alternatives was just as pointed. “Council says it has considered a broad range of alternatives, but the revised application does not present them,” he said. “Service reductions are rejected largely on preference. That may be politically relevant, but it is not the same as showing which cuts were modelled, how much they yield, and what residual SRV remains.”
His conclusion went to the heart of the matter: “A permanent compounding tax increase is the strongest revenue instrument available to a Council. It should be approved only when the evidence shows it is the last alternative and only to the minimum extent required. On the current material, that standard has simply not been met.”
That should have been the question at the centre of IPART’s decision. Did Council genuinely rebuild the case, or did it simply make last year’s rejected case smaller and more presentable?
AFFORDABILITY: On affordability, IPART also took a generous view. North Sydney is wealthy on average, and that fact plainly helped the council. But municipal averages do a lot of hiding. They do not tell you much about pensioners in apartments, single-income households, owners on minimum rates or small businesses already dealing with rising costs.
Kok criticised Council’s capacity-to-pay work on similar grounds, saying it characterised the community as “advantaged” with “exceptional” capacity to pay but did not adequately address the impact on the most vulnerable. She also noted that the housing stress analysis relied on 2021 Census data, while since 2021 CPI had increased by 22%, lending rates by 109% and North Sydney median rents by 45%.
The minimum rate increase is particularly sensitive. It is lower than the version rejected last year, but it still rises 63.58% over three years. That burden falls heavily on smaller assessments, including apartment owners. Last year IPART recognised that vulnerable ratepayers were more likely to be in apartments and therefore more exposed to minimum rates. This year the same problem appears to have been downgraded because the increase is slower.
That is not solving the problem but smoothing it.
The productivity finding is another weak spot. Council’s case was better than last year’s, and IPART accepted about $52m in savings and additional revenue over 10 years. But that number deserves caution. Some of it is extra revenue. Some is vacancy management. Some is internal reprioritisation. Not all of it is hard efficiency reform.
Reducing management salary spending and redirecting the money elsewhere in Council may be sensible. It is not the same as taking costs out of the organisation.
IPART saw some of these issues and approved the application anyway.
The same generosity appears in IPART’s treatment of alternatives. IPART accepted that Council had considered lower rate increases and other options. Kok, Bowdler, Spenceley and other objectors took a different view, arguing potential revenue from asset sales, road reserve sales, developer contributions, grants and other measures had not been developed to the point where it could be properly weighed against the rate rise.
These are not fringe questions. They go to whether a permanent rates increase was genuinely the last resort, or simply the easiest source of money.
CASE FOR A RISE? There is, evidently, a case for Council. Supporters argued North Sydney’s historically low rates had finally caught up with it. They said Council needed more revenue to maintain buildings, parks, footpaths, sporting facilities, community centres and other assets. Deferred maintenance only gets more expensive.
That argument has force. North Sydney cannot expect high amenity, average rates and ageing assets forever.
But IPART was not being asked whether Council needed more money per se. It was being asked whether this 53% increase, in this permanent form, had been justified.
Its approval conditions do not fully answer that concern. Council must use the money for the stated purposes and report annually on spending, outcomes, productivity and cost containment. Useful, but mostly after the event. The conditions do not impose hard savings targets. They do not stage the rise against delivery. They do not force rates down if asset sales, property reviews or other efficiencies improve the financial position.
The result is an approval that feels too trusting.
Council improved its application. But the 2026 decision reads less like a finding that those problems were fixed and more like a conclusion that they had been made smaller, tidier and conditional enough to pass.
That may satisfy the regulatory test. Whether it satisfies ratepayers is another matter.
North Sydney residents and businesses are now being asked to pay a very large permanent increase to boost Council’s revenue and fund its infrastructure program. They may reasonably wonder whether IPART has approved a genuinely reworked case, or simply a better-presented one.
Grahame Lynch