“The rate peg figure has been released earlier to allow councils more time to speak with their communities about their plans and projects for the coming year,” Minister for Local Government Barbara Perry said.

The annual rate peg is calculated by examining a range of economic factors, predominantly inflation.

“Inflation has been down and the rate peg reflects this,” Ms Perry said. “Rate pegging ensures councils receive a moderate rate income increase in line with changes in the economy.”

Councils can apply to the Minister for a special rate variation, which allows them to lift their income above the rate peg.

Any successful application must have community support and a strong business case. “This process makes it clear that any proposal by a council to lift rates above the peg needs to have the community’s backing”, Ms Perry said.

A spokesperson from Walcha Council was not available for comment regarding the announcement.

Changes in the annual rate peg over the previous rating periods were: 2009/10: 3.5 per cent 2008/09: 3.2 per cent 2007/08: 3.4 per cent 2006/07: 3.6 per cent.