The NSW government is proposing amendments to its Rating Bill which would give flexibility to councils to implement a Special Rate Variation without going through the usual IPART (Independent Pricing and Regulatory Tribunal) approval.
In particular it would allow councils to levy special rates for infrastructure that was jointly funded with other levels of government outside the rate peg without IPART approval.
NSW government grants typically require a matching contribution and so in providing a $1m grant to council, for example, the state government would expect council to match it with another $1m.
This is where council could then turn to the ratepayer base to institute a special rate variation for such a project arguing that if the community sees value in a particular project they may have to assist in its payment.
It is a way of increasing the rates over and above the rate peg. Councils, particularly rural ones, have long complained about the level of the rate peg while at the same time having to pay staff increases higher than the rate peg percentage which often has not covered increases in general costs and materials.
Council staff said that most of the reforms require changes to the Local Government Act 1993, and a Bill - the Local Government Amendment (Rating) Bill 2020 - has been prepared.
If passed by the NSW Parliament, this Bill would: allow councils to levy special rates for infrastructure jointly funded with other levels of government outside the rate peg without IPART approval and create a new rating category for environmental land.
It would also create more flexibility for councils to create rating subcategories for residential land, business land and farmland, including vacant land.
And while councils could amend exemptions that apply to water and sewerage special rates and to land subject to conservation agreements, they would have to report the value of such exemptions each year.
It would allow councils to sell properties for unpaid rates after three years rather than five.
Local Government Minister Shelley Hancock said councils rating bases had come under significant pressure as the expectation and demand for more services and infrastructure grew.
"Well-reasoned and sensible adjustments to the rating system will provide options for councils to generate revenue in a more sustainable way," Ms Hancock said.
She said the changes would improve distribution of the rating burden, which it turn would make rates fairer and help councils cater for population growth and infrastructure costs. Council is making submissions to the NSW government on the rating system review.
Sign up for our newsletter to stay up to date.