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Strengthening the system of local government

The NSW Government is committed to ensuring councils have a modern and fit-for-purpose framework under which to operate. This includes reviewing the legislation that governs councils, the way councils are resourced and the ways that they are held accountable to their communities.

Programs to deliver this include:

  • Creating streamlined, modern legislation
  • Implementing stronger auditing, including a new role for the Auditor-General in monitoring council performance
  • Improving the financial system of local government, including rating, access to cheaper borrowings through TCorp and reviewing the allocation of Financial Assistance Grants
  • Developing stronger accountability systems for councils, including the Auditor-General oversight of council financial statements, introducing performance audits and developing performance tools and frameworks.

Further work underway to improve accountability and performance includes:

  • A new Performance Measurement Framework
  • Revised Integrated and Reporting guidelines
  • Governance and performance guidelines.


Local Government Act reform

The Government has worked hard on a program of legislative reform to strengthen local government and ensure the community can have faith in the people they elect to represent them.

The Government agreed to streamline and modernise the Local Government Act in response to recommendations from the Independent Local Government Review Panel and the Local Government Acts Taskforce.

Phase 1 of the reforms are contained in the Local Government Amendment (Governance and Planning) Act 2016, which passed Parliament in August 2016. They focus on improvements to the governance, strategic planning and performance frameworks under which councils operate. Many of the Phase 1 reforms have already commenced operation including:

  • Increasing the mayoral term for a councillor-elected mayor to two years
  • Requiring all councillors to take an oath or affirmation of office
  • New purposes and principles for local government
  • New roles and responsibilities for mayors, councillors and councils
  • New functions for general managers
  • Clarification of the role of administrators
  • Appointing the Auditor-General as the auditor of all councils with the ability to conduct sector-wide performance audits
  • A new power to appoint a financial controller to a council in conjunction with a performance improvement order.

The remaining Phase 1 reforms relating to the following matters will commence operation when supporting regulations, codes and guidelines are finalised:

The NSW Government will continue to ensure councils have a modern and effective legislative framework under which to operate.

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