A State Government cash grab over vehicle licensing concessions could push WA council rates up 2.5 per cent this year, the local government sector’s lobby group has warned.

Local government authorities, the Australian Defence Force and Federal Government agencies have long enjoyed a 100 per cent reduction in licensing costs for their vehicles.

The WA Government has decided to scrap the concession to claw back $5.9 million over the next financial year alone, though State Government vehicles will keep the benefit.

Lynne Craigie, president of the WA Local Government Association, condemned the decision, which she said was announced over Christmas to come into effect on July 1.

“It’s one of those things we get a discount on in local government which enables us to provide more services,” she said.

“If money has to be used to pay registration in the budget, councils will either have to put up rates or cut back services.”

Ms Craigie said for a small council, an extra cost of $16,000 was equivalent to about a one per cent rate increase, while for a bigger council a $50,000 cost would translate to about a 2.5 per cent rate increase.

“It definitely has an impact. We estimate it will cost $1 million across the councils,” she said. “This is quite an impost to chuck on us with no warning.”

Play Video Household costs and mortgage rates are tipped to increase dramatically in 2017. The West Australian Video Household costs and mortgage rates are tipped to increase dramatically in 2017.

Ms Craigie said she believed it was “sneaky” move by the State Government.

“I think it was intended to go under the radar with no one picking it up before the election because the ramifications for local government will come after the election when our budget process starts to look at what we need to put aside and what we use our rates for. Significant costs will come there for councils,” she said

Rob Paull, chief executive of the Shire of Corrigin which has a population of 1100, said the end of the registration concession would cost $54,000 a year for its 70-strong fleet, equating to more than a 2 per cent increase in rates.

He said the end of stamp duty concession was estimated to cost the council $275,000 over the next 10 years, which would equate to a 4 per cent rate increase.

“It’s a judgment council will need to make, whether it looks at reviewing the rates, whether it reduces or changes services, or reviews staffing,” he said.

Transport Minister Bill Marmion said a review of vehicle licensing concessions showed WA’s were more than double the national average.

“These changes should not cost ratepayers a single cent more. Concessions remain for vehicles used for fire and emergency services as well as ambulances,” he said.

Mr Marmion said the savings, estimated to amount to $17.6 million over the next three years, would be invested into the road network and infrastructure projects.