In each edition we feature the views of a Local Government Association president. The following is from Councillor Genia McCaffery, President of the Local Government Association of New South Wales.
The Local Government and Shires Associations have been calling for the removal of rate pegging in New South Wales for a number of years – and we’ve finally made some headway.
The Independent Pricing and Regulatory Tribunal’s (IPART) draft report on the revenue framework for Local Government – which includes scope for more financial autonomy for NSW councils – seems to be good news for Local Government, and brings us a step closer to achieving this goal.
IPART has outlined two options in their report – both would give councils greater control over managing their finances.
The first retains a rate capping system but provides a better basis for assessing councils’ costs. It complements the Government’s recently announced Integrated Planning and Reporting Framework and strengthens medium term financial planning.
The second option allows councils to work with their communities to agree on future spending and levels of rates.
Councils that demonstrate good financial performance and have community support for their financial plans would be exempted from rate pegging for up to four years. We’re in full support of such a system.
Rate pegging has created a culture of uncertainty about the future for Local Government in NSW for 30 years.
It has often made us reluctant to commit to long term, larger scale projects, and it severely hampers our ability to provide our communities with the everyday services and facilities they need and desire. This report and its findings may well give us a way forward.
The report provides scope for councils to consult with their communities and credits us with the maturity to manage our own financial position.
Councils know how to make their ratepayers’ dollar go a long way. With solid financial planning, we’ll be able to not only meet our community’s short term needs, but also effectively plan for their future.
The argument that councils will increase their rates tenfold if rate pegging was removed all together is unfounded. It would be in a council’s best interest to rate fairly based on local needs – because if they didn’t, they would face the wrath of their communities at the ballot box.
We know our communities better than any sphere of government, so it’s councils – and not the State Government – that are best placed to determine how much to charge in rates, depending on our community’s unique needs.
NSW is the only State in Australia burdened by rate pegging. Hopefully the recommendations outlined in IPART’s draft policy will help Local Government abolish this outdated and cumbersome policy.
