A new environmental land rate category and more flexible residential, business and farmland categories are among plans to update the way council rates are charged.
Local Government Minister, Shelley Hancock, has unveiled a draft Local Government Amendment (Rating) Bill 2020, due to be introduced into State Parliament next year.
The Bill, which is now out for consultation until February 5, includes an environmental land rate category and the division of business rates into industrial and commercial categories.
It proposes a more flexible residential, business and farmland rating, as well as special rate variations to help councils undertake joint infrastructure projects with other levels of government.
The Bill will allow gradual rate harmonisation for amalgamated councils over four years to protect ratepayers from excessive and sudden rate rises, Minister Hancock said.
Central Coast Council Administrator, Dick Persson, said he was awaiting advice from senior management on how these proposed changes to the legislation would impact the Coast.
However, he expected that rates would be harmonised on the Central Coast by March.
Minister Hancock says the proposed reforms most significantly would see rating income growth to help councils provide for growing communities while still protecting residents from unfair rate rises through the rate pegging system.
Local Government NSW President, Cr Linda Scott, said the new ratings categories, along with a new ratings formula to recognise the impact of population growth, were certainly advances on the current moribund system.
“The rigidity of the current ratings system in NSW and its one size fits all rate peg has deprived communities of vital local infrastructure for far too long,” she said.
“We are staring down the barrel of a prolonged economic recovery period (due to COVID-19), and many councils are facing a financial crisis as they try to provide and maintain infrastructure and services to their community.
“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.”
Minister Hancock also foreshadowed a new ratings formula which incorporated recognition of the additional demands on community infrastructure and services by population growth, which is expected to be released by the Independent Regulatory Pricing Tribunal (IPART) in September 2021.
However, LGNSW says 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.
“Earlier this month, the Productivity Commission found average NSW council rates stood at $591 per capita in 2019, compared to an $835 average for all other states,” LGNSW President, Cr Scott, 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 congestion, lower productivity and a worse quality of life for everyone,” Cr Scott said.
She said a lot more work was needed on the government’s draft Bill to achieve meaningful reform and to ensure a financially sustainable system.