Council Cost Index
The Council Cost Index (CCI) for 2019-20 is 2.18%. The CCI indicates that for 2020-21 an average rate increase across the State of at least 2.18% is likely necessary to allow current levels of service to be maintained, assuming other revenue sources (e.g. grants) also increase in line with costs.
What is the Council Cost Index?
Since 2006 LGAT has published a Council Cost Index (CCI) to better reflect the cost increases associated with the delivery of Local Government services recognising that the CPI alone does not reflect cost increases across the range of council services. Wage costs, road and bridge costs and the CPI are the most common elements used in Local Government cost indexes across Australia and Tasmania is no different in that these elements are significant components of operating costs.
Using this composition of Local Government costs a modified index has been adopted for Tasmanian Local Government (from 2013) based on consideration of the wage price index, road and bridge construction index and the CPI for Hobart. Unfortunately, the ABS does not keep specific indexation data for roads and bridges in Tasmania. There is significant variation in the jurisdictional indices so rather than seeking to substitute another state’s data for Tasmania, we apply the Australian roads and bridges index - which represents an amalgam of all Local Government roads and bridges price movements in the country. It is considered that the specific topographical issues existing in Tasmania coupled with the relatively small competitive market allow for the adoption of the national average.
The Council Cost Index provides an aggregated picture of cost movements at the State level. The mix of construction and non-construction activity varies from council to council. Similarly, there are parts of the State where construction costs have been increasing faster than the State average. Such factors will all be of relevance at the local level when determining the level of rate increase necessary to provide the desired level of service.
The attribution of the indices to the calculation for this year is as follows: 50% WPI, 20% CPI and 30% Roads and Bridge construction.
Released March 2020
The Council Cost Index for this year is 2.18%.
Released March 2019
The Council Cost Index for this year is 3.38%.
Released March 2018
The Council Cost Index for this years was 2.42%.
Released March 2017
The Council Cost Index for this year was 1.5%.
Released March 2016
The Council Cost Index for this year was 1.87%.