Local council boundaries across Sydney should be consolidated around key commercial and transit corridors – with rate pegging abolished as councils grow in size and capacity.
The recommendations flow from a new policy paper, Local Government Reform, issued today by the Property Council of Australia. It urges the NSW Government to commission an independent public review to consider the optimal shape, role and financial structure of councils.
“We need to give local government the tools it needs to meet community demand for better infrastructure and services,” NSW Executive Director, Glenn Byres, said today.
“Local government is currently hampered by a choked financial base. NSW is the only state that applies rate pegging – and the strain on revenue forces councils to turn to developer levies and other taxes that damage housing affordability.
“Equally, existing boundaries were set 100 years ago and lack any real relevance to existing transport corridors and commercial centres.
“The circuit breaker should be an independent public inquiry that explores the modern boundaries, professional leadership and improved financial base that councils need.”
Headline recommendations in the Property Council’s paper include:
- An independent public review that reports within 12 months;
- A focus on redrawing boundaries to reflect the modern shape of our cities;
- Improved resource sharing between councils;
- Post-amalgamation, the abolition of rate pegging – tied to compliance with a
- Fiscal Responsibility Framework;
- Winding back the over-reliance on development levies;
- Using alternative finance methods such as Growth Area Bonds; and
- Full-time mayors with fixed terms.
“There is no doubt rate pegging constrains local government – but its abolition needs to be done in context,” Mr Byres said.
“Tied to amalgamations that strengthen local government and a strict fiscal framework, rate pegging could go and reduced developer levies would follow.
“Reforming councils to give them a strong financial base will in turn allow them to invest properly in the infrastructure needed to keep pace with growth. Local government reform happened seamlessly in Victoria and Queensland. It is now time for NSW to do the same.”
Media contact: Glenn Byres, NSW Executive Director, 0419 695 435