Future Ready Cabonne: Increasing the Understanding

7News Central West interview - Thursday, 30 April 2026 - Facebook

Council is facing increasing challenges in achieving long‑term financial sustainability. As part of addressing these challenges, Council has been considering whether a Special Rate Variation (SRV) may be needed in the future. Like many rural and regional councils, these pressures are driven by limited revenue growth, rising service delivery costs, and the need to maintain a large and ageing asset base.

At the 28 April 2026 Ordinary Council Meeting, Council chose to delay the decision regarding a Special Rate Variation at this time due to ongoing economic uncertainty at the global, national and regional level. Instead, Council has deferred this decision for up to 18 months. This will allow additional time to better understand potential economic impacts and to ensure the community is fully informed about the implications of both pursuing or not pursuing an SRV.

To support community understanding, Council will also be releasing a series of factual videos explaining Council’s finances and how they operate. These will help provide greater transparency around the financial pressures Council faces and the choices involved in long‑term financial planning.

For more information, to stay connected or to register for updates, visit: Future Ready Cabonne - Have Your Say

Initial Mail‑out

• 1,966 letters issued in November 2025
• Due date was 3 February 2026
• 788 pplication forms returned from mail‑out
• 54 additional applications received
• 842 applications completed in total
• 40.1% response rate to mail-out
• Overall applications vs mail‑out: 42.8%

A second reminder letter was issued on 12 February 2026, with a due date of 20 March 2026.As at 8 April 2026, a total of 1,418 farmland application forms have been submitted to council. This is an overall 72% response rate.

Council continues to receive completed forms and will assess as they are received.

Next Steps

1. Collate and validate all responses from the second mail‑out.
2. Identify non‑responding ratepayers and prioritise reviews based on risk and property characteristics.
3. Undertake desktop assessments using mapping, valuation, and historical land‑use data.
4. Contact landholders where further information or clarification is required.
5. Conduct on‑farm assessments for higher‑risk or unclear cases.
6. Escalate complex cases for peer review where necessary; and
7. Finalise classifications and update rating records.

In May 2025, Future Together Group provided council with a Rating Review Technical Report to inform future consideration of council’s rating framework. The report represents the first broad review of council’s rating structure since amalgamation in 1977 and was prepared to identify potential equity, governance, and financial sustainability issues.

The Rating Review Technical Report does not constitute an adopted council position. Further internal analysis, data validation, community engagement, and council consideration are underway and will be required before any recommendations are progressed.

The current farmland category review is being undertaken as a stand‑alone compliance and data integrity exercise. It is not the implementation of the report’s broader rating model and does not result in rate increases beyond the approved rate peg.

Council is required under the Local Government Act 1993 (NSW) to ensure that land within the Local Government Area is categorised correctly for rating purposes based on its dominant use. Over time, land use can change due to development, changes in business activity, lifestyle transitions, or the cessation of agricultural operations. Where rating categories are not reviewed periodically, there is an increased risk that properties may no longer be rated in a manner that accurately reflects their current use.

The review process involves assessing existing land categorisations, examining land use and valuation data, and ensuring legislative alignment. This supports an equitable distribution of the rating burden, strengthens governance assurance, and contributes to long‑term financial sustainability

The report identified several issues for council’s consideration, including:

• The current use of minimum rating and ad-valorem particularly within Residential and Business categories, may contribute to inequitable outcomes between ratepayers.
• Historic land categorisation practices increase the risk that some properties may no longer align with legislative rating definitions based on dominant land use.
• Within the Farmland category, some assessments may not meet the legislative test for genuine commercial farming activity, resulting in potential cross‑subsidisation by productive agricultural operations.
• Certain land uses, particularly quarrying and large‑scale agricultural milling and processing, may have a disproportionate impact on council infrastructure that is not fully reflected in current rating structures.

These matters were identified to inform further analysis rather than to recommend immediate structural change.

What is the difference between Minimum, Ad Valorem and Base Rating?

Under the Local Government Act 1993, councils may apply ordinary rates using either a minimum rate or a base rate, alongside an ad valorem component. The difference between these components is detailed below.

The Rating Review Technical Report suggests that greater reliance on base rates and ad valorem components, rather than minimum rates, may improve transparency and equity within and between rating categories. Any consideration of changes to rating methodology would require detailed financial modelling, community consultation, and formal council approval.

Council Rating Categories

Council’s current rating categories, determined in accordance with the Local Government Act 1993 (NSW), are as follows:

• Farmland
• Residential
• Residential – Canowindra
• Business
• Business – Canowindra
• Mining

Potential Rating Sub‑Categories Under Review

As part of the broader rating category review, council is assessing whether additional sub‑categories may be required to more accurately reflect dominant land use in accordance with the relevant provisions of the Local Government Act 1993. These matters remain under review, and no decisions have been made.

These potential sub‑categories are being examined to support compliance, equity, and transparency within council’s rating framework. Any future changes would be subject to further analysis, stakeholder engagement, and formal council approval in accordance with legislative requirements.

Consultation

Consistent with principles of good governance and informed decision‑making, initial consultation has occurred with identified Business - Agricultural Milling ratepayers referenced in the report. This consultation was undertaken to:

• Seek factual feedback on operational characteristics.
• Improve council’s understanding of land use and infrastructure impacts; and
• Inform internal analysis and future consideration.

This engagement does not imply endorsement of the report’s analysis or recommendations, and no decisions have been made regarding rating outcomes, category structures, or future rate impacts.

Linkage to the Long‑Term Financial Plan

The Rating Review Technical Report was prepared to assist council in future deliberations relating to its Revenue Policy and Long‑Term Financial Plan. Any changes to rating structures, rating mixes, or category incidence would need to be considered through council’s Integrated Planning and Reporting framework, including affordability, intergenerational equity, and service level impacts.

The current rating category review does not increase council’s overall rate revenue beyond the approved rate peg, does not pre‑empt any Special Rate Variation decisions, and does not commit council to implementing the report’s recommendations. Instead, it is intended to strengthen the accuracy and integrity of council’s rating data, supporting more reliable long‑term financial modelling.

Consideration of Additional Farmland Sub-Category

Farmland – Low Intensity

The establishment of a Farmland subcategory is necessary to ensure the appropriate rating of vacant land zoned for agricultural purposes in accordance with the Local Government Act.

Section 519 requires vacant land to be categorised based on its permitted use or surrounding development, meaning parcels zoned solely for farming, or surrounded by farmland, must be categorised as farmland regardless of vacancy or the submission of a farmland application.

Guidance in the Rating and Revenue Raising Manual reinforces that vacant land should not be arbitrarily categorised and that zoning provides a clear basis for farmland classification.

Introducing a Farmland subcategory also enables council to differentiate between genuine farming land and lower‑intensity or vacant agricultural land, allowing higher ad valorem rates to be applied where appropriate. Consistent with section 529(2)(a), this distinction would be based on intensity of use, with the preferred approach being a dominant-use farming category supported by a Farmland – Low Intensity subcategory.

Council’s 2026–2027 Budget forecasts a consolidated operating surplus of $6.68 million, inclusive of capital grant income. Excluding capital grants and contributions, the budget delivers an underlying operating deficit of $7.21 million.

The budget also provides for $30.30 million in capital works, with more than $17.00 million allocated to transport infrastructure, reflecting council’s continued investment in roads and related assets.

Efficiency measures were delivered through a structured review and savings framework, with a clear emphasis on identifying sustainable and repeatable savings, rather than one-off reductions. As a result, $837,000 of current savings and $314,000 in one-off savings have been incorporated into the 2026–2027 Budget.

2026/27 Cash Budget Summary

Key projects being delivered in the 2026/2027 financial year include:

Other Budget Highlights

The budget, together with the Long Term Financial Plan (LTFP), continues to highlight the challenges associated with council’s ongoing net operating results (deficits) before capital grants and contributions.

Across council’s General and Water Funds, operating deficits are forecast to increase over time unless corrective action is taken.

The General Fund is assessed as financially unsustainable in the medium term. After meeting operating costs, insufficient funding is available to fully address the required renewal of infrastructure assets. This shortfall contributes to a growing backlog of assets requiring repair or replacement.

The Water Fund is forecasting a substantial operating deficit, which is not sustainable in the medium or longer term and will require intervention to restore financial viability.

In contrast, an operating surplus is forecast in the Sewer Fund, indicating a sustainable financial position and the capacity to meet ongoing operational and asset renewal requirements.

The revised Long Term Financial Plan 2026-2036 (LTFP) provides a 10-year forecast incorporating updated economic conditions, new strategic asset management information, reprioritised capital works, population growth forecasts and a program of efficiency measures. This provides various results and performance indicators in relation to council’s financial sustainability, which is the degree to which revenues can meet commitments to operations, services and infrastructure.

Council’s financial structure is divided into three separate funds: General, Water and Sewer. Within the General Fund, council operates its Domestic Waste operations, which like the three funds, are subject to legislative restrictions and subsidisation between funds is not permitted. They operate as separate businesses with appropriate inter-entry charging where required to ensure full and accurate cost absorption.

The LTFP is presented using three of the main statements provided in the annual financial reports:

• Income Statement – this statement shows the operating result and change in net assets from the operations for the year.
• Balance Sheet – this discloses the assets, liabilities and equity of council.
• Cash Flow Statement – this statement presents the cash flows associated with council’s operating, financing and investing activities.

In preparing council’s LTFP, the following principles have been adopted. council will:

• Maintain a cash balance that can meet short-term commitments,
• Maintain service levels to the community as defined in the Community Strategic Plan,
• Maintain sufficient reserves for identified commitments,
• Review operating expenditure and improve efficiency,
• Pursue cost recovery on fees for services where possible, and
• Maximise investment returns within statutory guidelines.

Council has several policies in place that support these principles, which are outlines in the Annual Operational Plan each year. The main focus of these principles is financial sustainability.

A financially sustainable council is one that has the ability to fund ongoing service delivery and the renewal and replacement of assets, while ensuring sustainable funding sources. A key indicator for this is the net operating result before capital grants and contributions which can be found in the final line of the Income Statement. This shows the degree to which operating revenues can cover commitments for operating costs and asset renewals. A focus on achieving a positive or surplus result will enable council to adopt capital programs and asset management plans, sustainable organisational structures and annual budgets within a prudent long-term financial framework. Longer term economic modelling is critical to the success of meeting the needs of the community it services. The updated LTFP is a key component of council’s financial sustainability journey and responds to:

• Persistent structural deficits
• Escalating infrastructure renewal demands, especially for roads and the transport infrastructure programs
• The latest Asset Management Plans
• Increased depreciation following asset revaluations
• High labour, materials and construction cost inflation
• Reduced predictability of capital grants
• Community expectations for improvements in road condition and maintenance
• Rate peg increase set by IPART is consistently below actual cost increases
• The continues costs and recovery work since the significant damage of the 2021-22 flood events

Long Term Financial Plan Scenarios

Council has developed four scenarios that are relevant to its current financial position. These scenarios are:

1. “Base Case” Scenario.
2. “Financial Improvement” Scenario with a 4-year permanent Special Variation to general rates from 1 July 2027.
3. “Financial Stabilisation” Scenario with a 4-year permanent Special Variation to general rates from 1 July 2027.
4. “Financially Sustainable” Scenario with a 4-year permanent Special Variation to general rates from 1 July 2027.

Council also delivers Domestic Waste services through its General Fund. Revenues for Domestic Waste must be spent on Domestic Waste services, therefore, for the purposes of this LTFP, Domestic Waste has been treated as though it is entirely separate from the General Fund. This allows for a more unfiltered view of the financial sustainability of council’s day-to-day operations and infrastructure.

All three scenarios focus on the sustainability of the General Fund, which is the fund that covers the majority of the services and infrastructure that council provides. General rates are the primary source of revenue for General Fund Operations. Council does receive income from other sources, such as fees and charges, grants and contributions and investments. It also uses borrowings to fund specific General Fund projects.

Water, Sewer and Domestic Waste operations are forecast to continue as they are currently run, in line with the general assumptions provided for all three scenarios.

As the scenarios focus on the health and sustainability of the General Fund, forecasted statements and ratios will be reported in this LTFP for both the General Fund and the consolidated organisation.

This Strategic Asset Management Plan 2026-2036 (SAMP) sits alongside the Long Term Financial Plan (LTFP) in Council’s Resourcing Strategy. Its purpose is to communicate the implications of the current course of action (which is described as the base case scenario) and to explore alternative scenarios which involve investing more resources to reduce the risk.

This SAMP is best understood, as a key part of both Council’s Integrated Planning and Reporting (IP&R) and Risk Management (RM) Frameworks. It is a Risk Treatment Plan for Council’s infrastructure assets, although many of the activities to treat risk are unfunded in the base case scenario, which is why council is exploring alternatives.

Summary of our assets

Council manages an asset portfolio of $925.327M. The responsible and sustainable investment in these physical assets is crucial to the sound financial management of council's organisation itself but also, more broadly, for the benefit of our local communities.

Annually, the financial investment towards the management of this portfolio totals $22.685M operational and $28.317M capital expenditure, totalling $51.002M. This budgeted expenditure is utilised to deliver the objectives set in Council's Delivery Program, summarised as follows:

What does this SAMP do?

The SAMP provides a framework for prioritisation of the available resources to deliver the best possible value from all assets under council's control, with value understood in terms of realising the objectives in the Delivery Program. This value is achieved through consideration of risks that may prevent council from reaching its objectives, as well as the financial forecasts required to deliver the services into the future.

With a direct linkage to the Long Term Financial Plan, the SAMP forecasts on the current course of action where we will be in the long term. In the case where the SAMP indicates that council may not be in a position currently to deliver on its objectives in the long term, scenarios are modelled to demonstrate how a more sustainable management of assets may be achieved.

What does the SAMP tell us?

The draft Strategic Asset Management Plan (2026-2036) indicates that the following functions are at a high risk of council not meeting its objectives over the next ten years:

• Transport Infrastructure
• Flooding and Drainage
• Water Supply
• Sewerage

This assessment is primarily made on the basis that the funding needs for each of these functions is greater than the forecasted available funding within the long term financial plan, on a "continue as we are" scenario (base case). On the basis of this risk assessment, council would continue to prioritise the limited resources it had, but it is expected that a gap would emerge between what council was trying to achieve with the service, and the reality of a declining condition and thus performance of the assets.

To provide an indication of differing levels of asset management sustainability within council's general fund, three further scenarios have been explored within the SAMP:

The base case represents a "continue as is approach", and as shown in the summary tables does not satisfy future renewal and operational needs to manage council's infrastructure. The funding gap, if not addressed, is highly likely to manifest problems in the long term with premature deterioration of assets, greater complexity and cost with repair/replacement of assets, availability and reliability of assets will decline for each of the asset functions.

Consideration of options to increase grant funding to these assets will be challenging given uncertainty of grant funding from state and federal governments. Historically, grant funding programs cannot always be relied upon to be available when required, nor be available for the purpose to which what is needed to address the asset renewal or operational needs of the organisation. Advocacy from local government representative groups continue to seek consistency in the availability of fit for requirements grant funding, however there no commitment of reform to funding arrangements to local government.

There are four options available for consideration of how council can address the gap as it has been presented:

1. Accept the risk - which is to maintain the current course of action (the base case scenario)
2. Undertake further analysis on the risks - further work to improve asset data is built into the improvement plan
3. Allocate additional resources - consider the financial scenarios in the Long Term Financial Plan
4. Reconsider objectives - Are the aspirations achievable and conversations with the community about what can be done

The four options do not have to be considered in isolation, and council may seek to work with all four in determining the next steps in its management of assets.

The Local Government Act 1993 requires councils to consider principles of equity, social justice and the financial impact of rates and charges on their communities. Capacity to Pay assessments are commonly used to support:

• Annual Operational Plan and Budget
• Long-term financial planning
• Rating structure reviews or harmonisation
• Applications for a Special Rate Variation (SRV)

Cabonne Council (Council) is reviewing its current rating structure to ensure rates are shared fairly and equitably across the community. To support this review, Council engaged a Morrison Low Advisory to undertake a capacity to pay analysis to gain an understanding of where there may be areas or groups of ratepayers that may be vulnerable to potential rating structure changes.

In addition, the capacity to pay analysis was undertaken to provide council with an early indicator of the relative capacity to pay within the Cabonne LGA. The analysis was based on the SRV scenarios in the 2025-2035 Long Term Financial Plan against council’s current rating subcategories.

Geographic Groupings

The Cabonne LGA was divided into four groupings for the analysis to ensure that equity is maintained between areas, as each grouping has slightly differing economic and socio-economic profiles.

A summary of the groupings and the localities that they encompass has been provided in the following table and figure:

The methodology in examining the relative wealth between the different groupings focused on the following:

• Areas of social disadvantage including the age structure of each region, the typical make up of each household, household income (including the effect of dependents), and Socio-Economic Indexes for Areas (SEIFA) rankings.
• Vulnerable groups of individuals including persons who have or need core assistance, individuals who are currently unemployed, households currently under housing stress, and pensioners.
• Patterns in household expenditure and the impacts they may have on an individual’s ability to pay.
• Employment by industry, as well as value-added industry sector and the key productive sectors.

The above findings were compared to the current average rates to determine whether there are any groups or individuals that may be impacted by possible rating changes.

Rating Category Impacts

Council rates represent a high proportion of disposable income for low and fixed-income households. Even incremental increases can have a disproportionate impact on vulnerable residents, including pensioners. Taking these factors into account, the preliminary Capacity to Pay Report indicates that there is an overall moderate to strong level of capacity within the LGA, with much of the analysis highlighting improved indicators compared to that of the Central West Region and Regional NSW, combined with relatively low residential rates.

Residential Rates

There is marked variation in residential financial sensitivity across the four geographic groupings. The North and West display lower levels of socio‑economic advantage and, consequently, a higher potential for vulnerability and financial stress, while the South‑Central and East groupings demonstrate significantly greater advantage and capacity. These differences are reflected in average land values and residential rates, meaning the impact of any rating increase is proportionately lower in the more disadvantaged areas and higher in the more advantaged groupings. This moderates the financial impact on households with lower capacity and, when combined with an effective financial hardship policy, suggests there is sufficient relative capacity across all groupings to apply a rating increase equitably across the LGA.

Business Rates

Average business rates across the LGA are comparatively low relative to similar and neighbouring councils, regardless of the SRV scenarios applied, indicating capacity for the business category to absorb additional increases.

Farmland Rates

While average farmland rates move towards the upper range of comparable councils under SRV scenarios 2 and 3, this is offset by a strong and positive agricultural outlook. Agriculture represents the largest contributor to economic output and value add within the LGA, underpinned by a high level of industry diversity, supporting the view that the farmland category has capacity to accommodate higher rates.

Mining Rates

Comparisons of average mining rates are less informative; however, given Cabonne’s key mine is one of Australia’s largest gold operations, alongside historically strong gold prices and forecasts of continued price growth, there is considered to be substantial capacity within the mining category to absorb increased rates.

Next Steps

Following a formal review of the distributive equity of Council’s current rating structure including rating sub-categories, further analysis will be undertaken to evaluate the general financial capacity of ratepayers against the revised rating structure. A final report will be provided to Council following completion of the analysis and review.

In line with the Office of Local Government’s (OLG) Special Rate Variation (SRV) Guidelines, council is required to clearly demonstrate the steps it has taken, and plans to take, to improve productivity and contain costs. The Guidelines stipulate that Council’s Integrated Planning and Reporting (IP&R) documents, or an SRV application, must explain and quantify the productivity improvements and cost containment strategies realised in previous years, as well as those proposed over the period of the special rate variation. This requirement ensures transparency and accountability and provides assurance to the community and the regulator that any additional revenue sought is justified and necessary.

To ensure alignment with the OLG’s SRV Guidelines and consideration of a structured and transparent approach to defining and achieving financial sustainability, a Financial Sustainability Plan has been developed.

Council’s Financial Sustainability Plan details the following strategies and activities that council has taken, and plans to take, to meet the following criterion in the OLG’s SV Guidelines:

1. What is the council’s strategic approach to improving productivity in its operations and asset management?
2. What outcomes has the council achieved from productivity improvements and cost containment strategies in past years?
3. What productivity improvements and cost containment strategies are planned for future years?
4. How has the council’s levels of productivity and efficiency changed over time, and compared to similar councils?

The development of the Financial Sustainability Plan enables council to articulate how ongoing efficiency measures are being applied across the organisation. These measures are considered in the context of continuous improvement and sound financial management, and their estimated financial impacts are incorporated into the Long Term Financial Plan. This approach ensures that efficiency gains are not treated in isolation, but form part of an integrated strategy to support council’s long‑term financial sustainability and service delivery objectives.

Council's Financial Sustainability Plan will be reviewed in twelve-months and, if council proceeds with an application to the NSW IPART in 2028, prior to the application submission.

Land values across Cabonne have surged by more than $1.1 billion, with new figures set to shape the council’s 2026/2027 rates.

The latest valuations issued by the Valuer General of New South Wales place the total land value of the Cabonne Local Government Area at $5.89 billion, up from $4.78 billion in 2022.

In NSW, councils use land values determined by the Valuer General to calculate annual rates. At Cabonne, each property’s land value is multiplied by the council’s rate-in-the-dollar, known as the ad valorem rate, to determine its share of rates. A minimum rate ensures every property contributes a base amount.

While overall rates revenue is capped by the Independent Pricing and Regulatory Tribunal of New South Wales (IPART), changes in land values can shift how the total burden is shared between property owners.

The new valuations, issued at the end of 2025, will be used to model rates notices for the 2026/2027 financial year. Landholders should have received their Notice of Valuation in late February/early March 2026.

Property owners who disagree with their valuation have 60 days from the notice date to lodge an objection through the NSW Valuation and Objection Portal.