Rates in Parkes could rise by three per cent in the next financial year should Parkes Shire Council choose to increase them.

The NSW Independent Pricing and Regulatory Tribunal has now set the council rate pegs for the 2026-27 financial year.

IPART sets a separate rate peg for each of the state’s 128 local government areas and final rate pegs range from 2.7 per cent to 5.7 per cent.

In NSW any increases in council rates are capped by the state government via a “rate peg” imposed on each individual council.

Parkes' rate peg for 2026-27 is 3.1 per cent, the same as it is for Forbes.

“The rate peg allows councils to increase income from rates to keep pace with increased costs, while limiting the increase to what is necessary to maintain services,” said Tribunal Chair Carmel Donnelly.

“This helps councils keep providing services that ratepayers rely on.

Ms Donnelly said the rate peg reflects changes in council operating costs and that the Tribunal also included an adjustment to "smooth the impact" of local government election costs for ratepayers.

Local Government NSW (LGNSW) president and Forbes Mayor Phyllis Miller OAM said the outcome was broadly sensible and reflected IPART's improved rate peg methodology.

“While lower than last year, this reflects a lowering in inflation and this year’s rate peg range is slightly above the latest annual inflation figure,” she said.

“The decision to continue the practice of not imposing a maximum increase in the Domestic Waste Management Charge is welcome.

"This is a practical approach as councils work towards the Food Organics and Garden Organics (FOGO) mandate and will ensure innovation and better practice in resource recovery, avoiding waste going to landfill."

The 2025-26 council rate peg for Parkes was four per cent, which council adopted, while Forbes' was 4.4 per cent.

Eighty-three councils will also receive an additional population growth factor to reflect their increasing population, so council’s total rates income per capita keeps pace with population growth.

A population factor has not been applied to Parkes or Forbes next financial year, but has to Cabonne Council next door which includes Eugowra, Manildra and Canowindra, by 0.1 per cent making its final rate peg 3.4 per cent.

The rate peg only applies to a council’s ‘general income’, which is mostly from rates and makes up around a third of councils’ total income on average.

Councils receive revenue from multiple sources other than rates, including grants and user fees and charges.

Mayor Miller said the inclusion of existing adjustment factors for the Emergency Services Levy and population growth remained important in ensuring the rate peg better reflects the cost pressures faced by councils.

Combined with factoring-in election costs, she said councils will be able to better fund the rapidly escalating costs of elections.

However, Mayor Miller said the inclusion of a new adjustment for the dams safety levy would simply transfer the costs of this new NSW Government tax onto local communities in several council areas.

“The dam safety regulator is a NSW Government function and this responsibility should continue to be funded directly by the NSW Government, not passed onto ratepayers,” she said.

Almost a year ago the NSW parliamentary inquiry into the ability of local governments to fund infrastructure and services made multiple recommendations to address the financial sustainability challenges impacting councils.

Ms Donnelly said it is now up to each council to decide whether rates will rise.

"The rate peg doesn’t automatically change the rates notice people receive from their council," she said.

"Each elected council will decide whether to increase rates, which categories of rates to change, and what concessions apply to people in need of financial assistance.

“We encourage any ratepayers facing difficulty paying their rates bill to get in touch with their council for information on concessions and other assistance options.”