4 October 2022
3.7% rate peg will only add more pressure
It has been another big week for local government, headlined of course by the announcement from the Independent Pricing and Regulatory Tribunal (IPART) that the rate peg will be set at a baseline of 3.7% for 2023/24.
This decision will heap more pressure on councils still struggling to recover from years of droughts, bushfires, floods, the COVID-19 pandemic, skills shortages, rising costs and several other challenges.
With inflation hovering above 6%, a 3.7% rate peg will mean many councils will seriously have to consider reducing services, delaying essential upgrades to infrastructure and even reducing staffing levels.
We all know and understand that councils work hard to keep rates as low as possible, but we are also required to deliver services and infrastructure that our communities expect and deserve. This is simply not possible with a rate peg that does not reflect the economic reality.
IPART releases Issues Paper for rate peg methodology review
IPART’s announcement was more evidence that the rate peg methodology needs a complete overhaul.
Encouragingly on this front, IPART has released its Issues Paper as part of its much-anticipated review of the rate peg methodology.
The Issues Paper sets out some of the important factors that affect how IPART sets the rate peg and some of the questions it is seeking comment on from stakeholders.
IPART will be consulting extensively as part of this review and is now inviting comment with submissions due on 4 November 2022.
I would strongly encourage all councils to make submissions to IPART as part of this review.
This is a critical opportunity to overhaul the rate peg methodology to ensure that it reflects real cost movements in a timely and predictable way.
We simply cannot have a repeat of the infamous 2022/23 rate peg determination when the current methodology delivered a crippling rate peg of 0.7%.
LGNSW will also be making a submission and invites councils to provide comments for inclusion. Please forward comments or copies of submissions to LGNSW Chief Economist Shaun McBride at [email protected].
Workshops on the rate peg methodology will also be held in November and a Draft Report to be released in February. A public hearing will be held in 2023 after the Draft Report is released.
Win! Infrastructure contributions
In a big win for the sector, the NSW Government confirmed last week that it would not be pursuing its controversial reforms to infrastructure contributions.
LGNSW – with the support of several NSW councils – had been advocating against these reforms unless the NSW Government was able to clearly demonstrate that no council would be worse off. Having failed to do this, the government did the right thing and abandoned the legislative changes required to enact the reforms.
At a time when councils are under unprecedented financial pressures that have been well documented, it is essential the costs for new infrastructure to support growth is not shifted onto councils and ratepayers, but rather to those who profit from development.
I would like to express my thanks to all the mayors and councillors who joined with LGNSW in publicly opposing these reforms.
Uluru Statement from the Heart
At the LGNSW Special Conference earlier this year, councils resolved to support the Uluru Statement from the Heart’s call for Indigenous constitutional recognition through a Voice, and that a referendum be held in the current term of parliament to achieve it.
Last week, Uluru Statement from the Heart leaders released the History is Calling video, to build support for the upcoming referendum, which is due to take place next year.
Councils, as the closest level of government to the communities, are well placed to spread the word and help build support for the referendum. LGNSW looks forward to sharing more resources with our members as the work towards the referendum progresses.
LGNSW was also pleased to work with Aboriginal Affairs NSW earlier in the year, supporting councils to contribute to the stocktake of council partnerships with First Nations communities. The information gathered is now being considered by the NSW Closing the Gap partnership and will contribute to developing best practice partnership models for local government.
2021/22 LGNSW Annual Report now available
The LGNSW Annual Report has been released. It details our achievements, financial performance and the value we have provided to all of our members during 2021/22.
The Annual Report is available on our website and I would encourage all members to take the time to read through it when they have the opportunity to do so.
LGNSW Human Resources Summit – Early bird registrations extended
We have a very special offer for those who plan to attend our Human Resources Summit on 16-18 November at Rydges World Square in Sydney, with our early bird price extended to Friday 21 October.
There is now no excuse to miss this major event, which has been specially designed to provide HR professionals with the practical strategies and insights needed to address key workforce challenges that are facing local government today.
There will be a range of expert speakers who will provide evidence-based insights as well as the chance to connect face-to-face with the local government HR community and enjoy dedicated networking time.
Towards Net Zero Emissions Webinar
Following on from the success of our Climate Change Webinar Series earlier this year, LGNSW will stage a free webinar on 10 November that will provide invaluable insights on Power Purchase Agreements (PPAs).
The Towards Net Zero Emissions Webinar will detail the steps involved in negotiating a renewable energy PPA, options for setting up a PPA in council, risks and opportunities, as well as a guide to PPA procurement.
It will feature case studies from councils that have operating PPAs and participants will hear about the support services available from the Office of Energy and Climate Change.
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