The NSW Government has proposed some changes to the council ratings system.

Local Government Minister Shelley Hancock unveiled the draft Local Government Amendment (Rating) Bill 2020, due to be introduced into Parliament this year.

The Bill allows:

  • special rate variations to help councils undertake joint infrastructure projects with other levels of government

  • a new “environmental land” rate category, the division of business rates into industrial and commercial categories, and more flexible residential, business and farmland rating subcategories

  • gradual rate harmonisation for amalgamated councils over four years, rather than a single year hit

Ms Hancock also foreshadowed a new ratings formula, which incorporated recognition of the additional demands on community infrastructure and services by population growth.

Introducing flexibility to NSW’s antiquated ratings system is a good first step, according to Local Government NSW (LGNSW).

LGNSW President Linda Scott says proposed new ratings categories, along with a new ratings formula recognising the impact of population growth, are certainly advances.

“However, we are staring down the barrel of a prolonged economic recovery period and many councils are facing a financial crisis as they try to provide and maintain infrastructure and services to their communities,” Cr Scott said.

“The rigidity of NSW’s current ratings system and its one-size-fits-all rate peg has deprived communities of vital local infrastructure for far too long.

“These reforms don’t go far enough to solve underlying financial sustainability issues, so we are looking at a band-aid rather than a cure.”

She says that real change requires the Government to take the next step and scrap the rate cap – a move also backed by the NSW Productivity Commission, NSW TCorp, the Planning Institute of Australia, the Committee for Sydney, the Sydney Business Chamber and the Western Sydney Business Chamber.

“The Productivity Commission [has] found average NSW council rates stood at $591 per capita in 2019, compared to an $835 average for all other states,” she said.

“This means our communities right across NSW are missing out on good local roads, footpaths, sports facilities, parks, and all the other infrastructure and service components they need.

“If councils have insufficient funding to keep local infrastructure such as roads in shape, we all suffer – through increased congestion, lower productivity and a worse quality of life for everyone.”