The NSW Government has pledged to support 15 of the 17 recommendations from a parliamentary inquiry examining the financial sustainability of local councils.
Launched in March 2024 at the request of the Local Government Minister, the Upper House inquiry investigated long-standing concerns over the ability of NSW councils to fund essential infrastructure and services.
Cost pressures, especially in rural and regional areas, have significantly impacted councils’ capacity to deliver core services.
The government’s response outlines five key reforms, including continued oversight of council rates by the Independent Pricing and Regulatory Tribunal (IPART) to ensure revenue aligns with cost changes while protecting ratepayers from excessive hikes.
Councils seeking permanent rate increases will be required to complete a Comprehensive Spending Review submitted to IPART, examining both revenue and expenditure.
Other reforms include simplifying the Special Variation process, enhancing transparency in local government financial statements, and establishing an Expert Advisory Panel of experienced local government professionals to advise on implementation.
The government will also conduct an audit of local government fees and charges and review state grant distribution models to ensure sustainable funding for councils.
Local Government Minister Ron Hoenig said the reforms aim to ensure councils are financially sustainable while maintaining local democracy.
“The role that councils play in building connected communities and fostering local development cannot be overstated. But the reality is, many councils are struggling under financial pressures,” Hoenig said.
The Minns Government’s response stops short of supporting two of the inquiry’s recommendations, but details on the rejected proposals have not been provided.
