Council rates across the state will have their rates capped at 3.4 per cent next year, following IPART’s decision, down from 3.6 per cent for 2012/13.

The average residential ratepayer in NSW is paying an average of $860 for 2012/13.

If councils choose to take advantage of the full increase, rates will increase by $30 per year on average.

Orange councillors will decide how much rates should increase when they formulate the council’s budget in May next year.

Orange Ratepayers Association member Brian Wood was confident the council would choose the maximum increase.

“I don’t think they should increase the rates by 3.4 per cent, but I think they will because they’re looking for the money,” he said.

“I don’t think it’s right. I think it’s penny pinching at the moment.”

Prior to his election Cr Ron Gander said the council’s rates were too high.

He would not say if the council should take advantage of 3.4 per cent rate cap, but described it as a “reasonable amount”.

“My recommendation would be to minimise the rate rise,” he said.

“But I’ll wait on the advice of the director of financial services.”

IPART chairman Dr Peter Boxall said the rate peg represented the rising costs for councils, but was down on last year’s 3.6 per cent cap because of a reduction in assistance for the carbon price and productivity improvements.

Rising employee wages, construction costs, and electricity prices were the main reasons for the 3.4 per cent rate peg.

Mr Wood said he expects Orange council to use costs as an excuse to increase rates.

“They forget they’ve got over $100 million invested,” he said.

“It’s not their job to invest ratepayers’ money. It’s their job to fix the infrastructure.”

Council spokesman Allan Reeder said council chose to go with the maximum increase of 3.6 per cent for the 2012/13 rates.

clare.colley@fairfaxmedia.com.au