Kempsey's proposed 43% rate rise over three years in northern NSW alarms disadvantaged residents

The father-of-two, living in one of the state's most disadvantaged communities, now considers meat a luxury.

"It's getting to the point where it's going to be impossible and we're going to have to start going without the essential stuff," Mr Arnott said.

Kempsey Shire Council wants to charge its residents up to 43 per cent more in rates over three years to avoid going into a $79 million deficit.

Despte Mr Arnott rallying almost 10,000 locals against it, last week council voted to go to the Independent Pricing and Regulatory Tribunal (IPART), for approval.

"I really regret we had to do that but if Kempsey Shire Council is to be viable into the future we need to do this," the council's mayor Leo Hauville said.

There has been a groundswell of opposition in communities faced with the prospect of big rate rises, such as Bathurst.

That community successfully stopped its council going ahead with plans to raise rates by up to 70%.

Locals argued it would push people already struggling financially to breaking point.

Mr Arnott said Kempsey's proposed rate hike could see his annual bill rise by more than $500 over the next three years.

It's a cost he said he cannot incur after soaring interest rates, power bills, and the increasing cost of living.

"They're trying to make sure we have services and playgrounds for our kids in the future," he said.

"At the end of the day, if we can't afford to put a roof over their heads, there's not going to be a future."

But Mr Hauville said they had no choice because council is facing unprecedented financial pressures too.

"We would have to reduce services by something like $8 million a year and that would be a huge impact on our community, so we had to balance that," he said.

Hundreds of councils rising rates:

The IPART has approved above-average rate rises for 115 councils, out of 128 across NSW, over the past three years.

Those councils proved their financial needs were not being met under the current rate peg of 3.7%, which has not risen in line with inflation.

Some 86 of those were granted under special circumstances last year, due to high inflation and global uncertainty, and were capped at 2.5 per cent above the rate peg.

But other "special rate variations" were far higher, such as Strathfield Council in Sydney, which had a 93 per cent rise approved.

At least nine councils across NSW are in the process of consulting the community about hiking rates for 2024-2025.

Kate Friend lives at Berowra in Sydney's Hornsby Shire Council area, where rates will rise by 31% over the next four years.

Despite strong community opposition, the council went ahead with the special rate variation to avoid millions of dollars in forecast deficits.

Ms Friend said her family cannot withstand further rates rises, both from council and on the home loan.

"It's simply going to break us," Ms Friend said.

"Two days before the end of the week we have run out of money and we're living with whatever we have left in the fridge," she said.

The mother of three teenagers is having to sell off assets, like the caravan, and downsize the car to pay the bills.

"As a ratepayer, I would expect council to do the same thing, to tighten their belts as well, see where they can actually utilise their money a bit more," she said.

Hornsby Shire Council said the decision was "not taken lightly" and that it was well regarded for "careful and prudent financial management".

Battle between governments:

Local Government NSW blamed cost shifting, freezing of state government grants and infrastructure backlogs for council's poor bottom lines.

"Probably eight years ago, hardly anybody was seeking such massive rate variations, maybe one or two," president Darriea Turley said.

Ms Turley said councils legally cannot just go out and increase their rates, they have to prove to IPART they have consulted with their community.

"For every councillor, every mayor out there, they are part of the community," she said.

She said they are trying to avoid things like sacking staff or closing libraries.

"If the community's saying we don't want the special rate variation then there has to be a decision made … what services are we going to have to forego?"

Local Government Minister Ron Hoenig has ordered IPART to conduct an independent review into the financial sustainability of councils.

He said the sector had "some very substantial problems" in overseeing and managing its affairs.

"It's not just a question of income, it's also question of where they're spending their money and how much they're spending," he said.

Concerned about the cost-of-living crisis, he believes councils need to tighten their accounting and make decisions more transparent.

"They're the third tier of government in Australia," he said.

"Every government in Australia is short of revenue and have to make do."

IPART recently announced changes to its rate cap methodology to better reflect changing council costs.

The regulator said concerns about council's financial equity and affordability can be addressed through the independent review.

Local Government NSW said it welcomed the review.

Original Story By | Xanthe Gregory and Isla Evans