The Independent Pricing and Regulatory Tribunal (IPART) began 3 independent reviews of local government in late 2012 and delivered its final reports in 2019.
The reviews required detailed consideration and consultation. For detailed information about the process involved, go to:
- Local Government Rating System
- Review of reporting and compliance burdens on local government
- Local Government Compliance and Enforcement
The second review focused on reducing burdens placed on councils by the state government. The third review focused on reducing costs imposed by local government on business and the community.
The 3 reports are nearly 1,000 pages long and contain 135 detailed recommendations – covering some of the most significant issues facing councils and the community. Download the reports below.
The NSW Government carefully considered each recommendation and ruled out some because they would impact on vulnerable members of the community, affect regional jobs and economies, and substantially increase costs for taxpayers and the broader community.
A number of recommendations were implemented through other reform programs. An IPART Government Interim Response to Reports (PDF, 103 KB) was released while widespread consultation with residents, council staff, councillors, peak bodies and other key stakeholders occurred as the Government finalised its responses (see below).
Response to the IPART rating review
The Government released its response to IPART’s Review of the Local Government Rating System with a summary analysis of the 110 submissions received. Key elements are summarised below.
- Within the context of the broader rating framework there are limited benefits for the implementation of a Capital Improved Value (CIV) method of calculating rates at this time.
- The Government does not support the recommended changes to the local government rates pensioner concessions framework and does not support significant changes to the existing rating exemptions framework. The Government is committed to not disadvantaging vulnerable communities.
- It is in agreement with providing support for greater flexibility in the current rating system through the creation of additional rating categories and sub-categories, and facilitating councils’ ability to align income growth with population growth.
Consultation on rating reform
Following extensive consultation with the local government sector and the community, the NSW Government released an Exposure Draft of the Local Government Amendment (Rates) Bill 2021 (PDF, 242 KB) to implement the IPART Review of the Local Government Rating System (PDF, 2.9 MB) for further comment.
The Exposure Draft Bill, and other key rating reforms, if implemented, will help to improve the equity and efficiency of the rating system and enhance councils’ ability to implement sustainable fiscal policies over the long term.
A consultation guide, Towards a Fairer Rating System (PDF, 498 KB) was released to explain the proposed changes in the Exposure Draft Bill and to assist councils and others to provide feedback on this and other rating reforms.
The Government received more than 215 submissions which have been assessed in shaping the final Bill for introduction to Parliament.
Aligning rating income with population growth
In its response to the IPART rating review, the NSW Government committed to allow rating incomes to grow in line with population growth to ease growing pains for councils and communities.
Some councils, particularly in Sydney’s growth corridors, have faced a substantial increase in population while their rating bases have come under significant pressure with higher demand for new or upgraded local infrastructure and services.
In late 2020 the Government commissioned IPART to develop a methodology for population growth to be taken into account when it sets the annual rate peg which caps council rating revenue increases each year.
The measure is designed to generate additional revenue for councils to provide infrastructure for growing communities while protecting residents from unfair rate rises through the rate-pegging system.
The Government has released modelling by the Centre for International Economics (CEI) to outline financial impacts on councils of aligning rating income with population growth and reforms to the NSW infrastructure contributions system.
The modelling reveals NSW councils would receive $675 million in additional rates over five years, with reduced infrastructure contributions of $275 million, resulting in a net gain of $400 million to provide key infrastructure for growing communities.
Councils have been placed into one of four categories depending on whether they are metropolitan or regional and non-metro councils and above or below the State average for population growth.
The new population growth methodology would be implemented from the 2022-23 financial year.
For more information about development of the population growth methodology, see Review of the rate peg to include population growth on the IPART website and this document about the CIE Modelling (PDF, 206 KB).
More information
Visit Housing and productivity contribution for more information about reforms to the NSW infrastructure contributions system.