The Coast’s ten-year financial plan assumes a permanent rate rise from 2031

A Long Term Financial Plan is the least-read important document a council produces. It is where the ten-year arithmetic lives, and where assumptions that will decide your rates get written down years before anyone votes on them. This one was adopted alongside the 2026-27 budget and has been on the council’s publications page since July. We read it, and the 2024 edition beside it.

The number that runs through everything

In 2021-22 the council’s rating base was lifted by a temporary special rate variation, part of the recovery after its financial crisis. It is worth about $31 million a year, and it expires in 2031, inside the window this plan covers.

The plan names that squarely as a challenge. The council, it says, needs to plan for the expiry of the temporary Special Rate Variation in 2031, which would affect our ability to continue delivering services and projects if not addressed.

What happens if nothing is done

Scenario 1 is the council’s base case, described as No Action Taken. It removes $31.0M in 2031-32 reflecting the expiry of the temporary increase in rating income and assumes no offsetting measures. On the council’s own figures the operating result turns negative from 2027-28, four years before the expiry, and then falls away sharply.

The plan does not present this as a forecast of what will happen. It says plainly that Scenario 1 does not support financial sustainability. It is there to show the size of the hole.

The preferred answer is a permanent variation

Scenario 2 is the one the council prefers, and its first two assumptions are the story: the temporary variation of $31.0 million ceases in 2031-32, and Rating income of $31.0M sought through a permanent special rate variation from 2031-32.

It is not the only lever in that scenario. The council also assumes about $5 million a year in additional income from other sources by 2031-32, and an efficiency target reducing operating expenditure by a forecast $11.1 million in the same year. With all three, the operating result stays in modest surplus for most of the decade and unrestricted cash stays positive throughout, though it falls from $98.7 million in 2030-31 to $7.1 million by 2035-36, and the operating result turns slightly negative in the final year.

So the preferred plan is not simply a rate rise. It is a rate rise plus efficiencies plus new income, and even then the margin at the end of the decade is thin.

What changed since 2024

The previous plan, covering 2024-25 to 2033-34, also crossed the 2031 expiry, and was blunter about it. That document noted the temporary variation was approved within the context of financial recovery, rather than being based on an analysis of financial settings required to achieve financial sustainability, and warned that on expiry Council’s revenue will drop significantly and to a point where minimum service levels will not be able to be sustained.

What it did not contain was a scenario that solved the problem with a permanent variation. The phrase “permanent special rate variation” does not appear in it. Its four scenarios were built around actions within the council’s control, maintaining current income, and a variant adding $10 million of asset maintenance, and it named none of them preferred.

The 2026 plan has five scenarios, names one preferred, and that one requires IPART’s approval of a permanent increase five years from now. That is a real shift in the council’s stated position, and it is worth residents knowing about it in 2026 rather than 2031.

Two other assumptions worth seeing

The plan assumes CPI of 5.2 per cent in 2026-27, falling to 3.5 and then 3.0 per cent, while the rate peg is 3.2 per cent for 2026-27 as determined by IPART and assumed at 3.5 per cent thereafter. Materials and services are escalated at the CPI figures and wages at 4.0 per cent to 2028-29. In other words, the council is planning on its costs rising faster than its rate income in the first year, which is the structural squeeze behind everything above.

It also states that the modelling contains only some allowance for population growth in either operating income or operating expenditure, and flags that as a refinement for future plans. For a growing region that is a material caveat and the council says so itself.

Our view, labelled as such

Nothing here suggests the council is hiding anything. The opposite: the base case, the preferred scenario and the expiry are all set out in an adopted public document, and the arithmetic is honest enough to show unrestricted cash at minus $405 million if nothing is done.

The point is that a decision of real consequence to every ratepayer now sits inside a plan most people will never open. A permanent special rate variation is not a technicality; it is the difference between a rate increase that ends and one that does not. It will need an IPART application, and that process has its own consultation. But the assumption is already load bearing, five years out, and the community engagement that accompanied this plan was about the budget, not about that.

Sources

1. Central Coast Council, Long Term Financial Plan 2026-27 to 2035-36 (PDF, 56 pages, downloaded 3 August 2026): the five scenarios, the naming of Scenario 2 as preferred, the permanent special rate variation assumption, the Scenario 1 and Scenario 2 projection tables, the CPI and rate peg assumptions, and the population-growth caveat.
2. Central Coast Council, Long Term Financial Plan 2024-25 to 2033-34 (PDF, 55 pages, downloaded 3 August 2026): the earlier treatment of the 2031 expiry, the four scenarios, and the absence of any permanent special rate variation scenario.
3. Central Coast Council, Delivery Program and Operational Plan publications: the page carrying both adopted plans. Read 3 August 2026.
4. The Coast Record, the 2026-27 budget: the one-year picture this ten-year plan sits under.

Read the plan differently, or work in council finance? Tell us and we will check it against the document and log the outcome here.