Tuesday, March 5, 2024

LGNSW submission to IPART details ‘crippling’ impact of rate peg

Local Government NSW (LGNSW) has this week published its draft submission to IPART’s review of the state’s rate peg methodology.

“Our submission details the crippling impact the rate peg has had on the financial sustainability of councils and how it has deprived communities of the infrastructure and services they expect and deserve,” LGNSW President, Darriea Turley.

“We also reference how the methodology used to determine the rate peg is fundamentally broken, as evidenced by IPART’s initial decision to cap rate rises at 0.7% for 2022/23 in the face of rising inflation expected to peak at 7.75% at the end of this year.”

As part of LGNSW’s recommendations, it has called for the rate peg to be abolished and replaced with a non-binding reference peg that would guide councils’ rate determination for each financial year.

In addition, it made a number of recommendations to improve the rate peg methodology and related policies in the interim. These include:

  • Overhauling the Local Government Cost Index to become a more forward-facing index to help ensure the rate peg is not formulated based on historical data;
  • Recognising the cost differences between categories and cohorts of councils;
  • Providing councils with more flexibility around the rate peg;
  • Streamlining the special variation process.

“We now look forward to engaging with IPART to discuss our submission in more detail as the consultation process continues,” President Turley said.

LGNSW President, Darriea Turley.

Reminder! Register for IPART workshops

As part of its review of the rate peg methodology, IPART has begun holding a series of in-person and online workshops over the next fortnight.

The workshops aim to make sure IPART has a good understanding of all the issues with the rate peg, including identifying potential options reforms that will inform the draft report.

Councils can still register for the following workshops:

  • Online (Rural and Regional) – 24 November (9am – 12pm);
  • Forbes – 24 November (1pm – 4pm);
  • Sydney – 28 November (10am – 1pm);
  • Tamworth – 1 December (10am – 1pm);
  • Online (Metropolitan) – 2 December (10am – 1pm).

“I would once again encourage all councils to attend these workshops so that each of you can provide details on how the current methodology is failing our sector,” said President Turley.

More information on the workshops, including dates for each of the locations, is available via the IPART website.

Latest Articles