This may be an unpopular thing to say, but the decision by Sydney reduce the cap on increases in local council rates to 2.6% in light with changes in the consumer price index makes very little sense.
Councils are elected bodies that are meant to manage things in the interests of local residents. Putting an artificial cap on spending doesn't make a great deal of sense in the first place, linking it to a measure that has little to do with shifts in councils' real costs makes less sense.
Councils have been complaining for some time that the artificial and arbitrary rule has led to a run down in local infrastructure. There appears to be at least some truth in this.
As early as 1926 those supporting self government in New England were using the case of local government to support their contention that provincial councils would not work as an alternative to new states. They said then, and it has been true since, that Sydney always wanted total control and would interfere whenever it suited them.
The cap is really one of those arbitrary things so beloved by Sydney.