Recent legislative changes for local government – Local Government Rating Reform
The NSW Government is committed to strengthening the performance and sustainability of local government. To deliver on that commitment, the Minister for Local Government, the Hon. Shelley Hancock MP, introduced a Bill containing a series of sensible reforms developed collaboratively with the local government sector as part of an extensive public consultation process.
That Bill, now the Local Government Amendment Act 2021 was passed by the NSW Parliament on 13 May and assented to on 24 May 2021. A copy of that law as passed by the Parliament made be viewed here.
This law provides for changes that implement the Government’s commitments to rating reform and enables superannuation contribution payments for councillors. It also aligns terms of office of chairpersons for county councils and joint organisations to their member councils and allows greater flexibility in the administration of elections.
Immediate changes to the rating system
There is now greater flexibility for councils formed in 2016 to harmonise rates from 1 July 2021. Each council can choose, in consultation with their communities, to harmonise their rating structures gradually over up to 8 years.
All councils, including those harmonising their rating structures, may also:
- set separate residential rates for different residential areas
- set different rates for farmland based on geographic location
The Government is strongly committed to ensuring that growing communities have adequate and effective infrastructure needed to support that growth. To that end, IPART has been commissioned to recommend a new methodology for taking population growth into account when setting the rate peg. A final report on this review is due to be completed in September 2021.
The Act now clearly allows multiple rate pegs to be set, if required, enabling the Government to deliver its commitment to align council’s general income to population growth to help relieve pressure in growing communities.
Further information about IPART’s review may be found here.
When changes to the rating system come into effect
While the Local Government Amendment Act has been assented to, not all changes have come into effect. Some changes took effect on 24 May 2021 and may be implemented by councils and others will commence in future by proclamation, once regulations and guidance may be made to support implementation.
The following table sets out when each rating change commences.
|Reform||Commences||Applies to||Regulations required?|
|Gradual rates harmonisation||On assent||Merged councils||No|
|Separate residential rates in urban areas||On assent||All councils||Yes|
|Farmland rates by location||On assent||All councils||No|
|Multiple rate pegs||On assent||All councils||No|
|New environmental land rating category||By proclamation||All councils||Yes|
|Change to exemption for conservation agreements||By proclamation||All councils||Yes|
|More flexible business rates||By proclamation||All councils||Yes|
|New special rate for joint infrastructure||By proclamation||All councils||No|
|Exemptions for special rates||By proclamation||All councils||No|
|Limiting postponement||By proclamation||All councils||No|
Local government webinar on rating reform
On 25 June 2021 the Office of Local Government held a webinar for local government about changes to the rating system arising from the Local Government Amendment Act 2021.