On Tuesday, the Independent Pricing and Regulatory Tribunal (IPART) announced local government income rises would be pegged at 1.5 per cent for the 2017/18 financial year.

Councils in the region were perplexed with the revenue-raising cap, drawing attention to growing costs and backlogs.

Tamworth Regional Council (TRC) general manager Paul Bennett said IPART’s rate-peg determination was the tribunal’s “lowest ever” and posed “yet another financial challenge for all local government”.

“No doubt on face value this may seem appealing to ratepayers in our region, but the low increase to the maximum general income will make it very hard for council to maintain our delivery and service standards,” Mr Bennett said.

The Tamworth GM said the “blanket approach” taken by IPART didn’t take into account the additional costs faced in regional local government.

“Councils in our capital cities aren’t responsible for the extensive road or drainage networks like ours is,” he said.

“They don’t experience the same freight costs and in Tamworth’s case, as our city grows, so too does demand for more open space and community facilities.”

Mr Bennett also pointed out the widening gap between revenue and growing construction costs.

“While council’s ability to raise revenue will be capped at a 1.5 per cent increase in the year ahead, we have already seen a 2.7 per cent increase in construction costs this year,” he said.

“How are councils supposed to remain “Fit for the Future” when the realistic gap continues to widen?”

Walcha Council general manager Jack O’Hara said it was extremely disappointing and the rate peg also failed to allow councils to address the infrastructure renewal backlog.

However, Mr O’Hara said Walcha would definitely not be seeking a special rate variation.