TWEED Shire Council is refusing to withdraw a booklet outlining its seven-year infrastructure plan despite complaints from the business community that the funding formula in the booklet is misleading.

The council has proposed a six per cent rates increase over the seven-year life of the plan to fund $133 million worth of projects.

But Tweed Heads Chamber of Commerce president John Murray, a former councillor, called for its withdrawal, saying the booklet would be misleading to the average ratepayer and business owner.

Mr Murray said the booklet failed to explain that the six per cent rise would be compounded each year, meaning that for every year the six per cent was paid, the base total of rates would increase.

"For every year you'll be paying that extra rate rise another six per cent will be added to your base rate amount, and then the next year the six per cent rise would be calculated on that new amount," he said.

The business group also is concerned that the booklet fails to clarify whether the rate paid by businesses would also be subject to a compounded rate rise.

Mr Murray said people could not comment adequately on the plan because they would be unable to determine the actual costs involved in the rate increases, whether they could afford them, and whether they would be good for the shire.

Acting general manager Mike Rayner addressed this week's meeting of the Chamber in an attempt to clarify the council's proposed rate rises.

"We're basing it on today's dollars because there's no other basis on which to base it," he said.

"The CPI (consumer price index) may or may not move but in terms of real dollars the CPI is just a reflection of increased costs, in-creased wages and the like and all we can do is to base it on today's dollars which is what we've done.

He told the meeting the council was seeking endorsement from the state government to get an increase for seven years, but each year it would still be a matter for the council of the day.

He said the council would still be duty-bound to go through the management plan process, have public meetings and exhibit plans to determine what the increase, if any, would be.

"You can project any amount of increases into the future and of course they compound," he said.

Mr Rayner said the council was receiving a lot of responses from a questionnaire in the booklet.

"The community is really responding to our request to engage with them and we're very grateful ... we encourage those who have not completed the questionnaire to do so," he said.

Despite Mr Raynor's address, the chamber resolved to call for the booklet to be withdrawn.

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