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The New South Wales Productivity Commission’s Green Paper on Productivity Reform, Continuing the Productivity Conversation released in August, has joined the chorus of voices calling for changes to the rate pegging system.
The report recognised a flexible rating system was the most efficient way of helping councils meet the risings costs of serving their communities.
Local Government New South Wales (LGNSW) President Linda Scott, said, “The paper is simply the latest in a long line of reports identifying the glaring problems with Government rate pegging.
“Communities expect councils to take on increasing financial responsibilities resulting from population growth, increased infrastructure requirements and more than 100 service demands.
“Added to this is the issue of cost shifting – where State and Federal governments make councils carry the can for costs previously borne by them.”
The Productivity Commission’s Green Paper said rate capping greatly hampered councils’ ability to deliver local services and infrastructure such as parks, libraries, bridges, cycleways and sports centres.
The 300 page report echoes previous findings such as the Henry Review of Taxation, the NSW Treasury Corporation’s assessment of the financial sustainability of NSW councils and the NSW Independent Local Government Review Panel’s Final Report.
Business lobby groups, the Committee for Sydney and the Sydney and Western Sydney Business chambers have also called for abolishing the pegging system.
Last month’s Productivity Commission Review of Infrastructure Contributions in NSW issues paper suggested rate pegging had contributed to the State’s complex infrastructure contribution system.
“Increased rate flexibility must not come at the cost of other vital funding streams councils rely on, such as infrastructure contributions from developers to support development and growth of local communities.”
Cr Scott said LGNSW had been calling on the NSW Government to abolish rate pegging on behalf of councils for decades.
“Increasing numbers of reports back our call. Surely the writing is on
Currently NSW and Victoria are the only states with pegged or capped rates, however the South Australian Government has included rate capping in its plans to reform the state’s local government sector and the topic is still looked at from time to time in other states.