We provide the minister with advice on the average rate cap for each financial year.
Our advice on setting the rate cap for council rates
Each year, the Minister for Local Government sets the rate cap that specifies the maximum councils’ can increase rates for the forthcoming financial year. The minister can set a cap that applies to all councils, a group of councils or a single council.
Our advice to the minister includes:
- a recommendation for any adjustments to be applied to consumer price index in setting the cap for all councils, a grouping of councils or any individual council
- the rationale for any adjustment
- a preferred option if we recommend more than one option.
Council can choose to submit a higher cap application to us if the rate cap does not meet their needs.
Our latest advice to the Minister for Local Government
In this letter to the minister, we recommend our revised formula for the average rate cap, which applies a 90 per cent weighting to the CPI component and 10 per cent weighting to the WPI component (fixed at its value at the time the Fair Go Rates system was introduced).