Local Government Cost Index

In 2023, following IPART’s Review of the rate peg methodology, IPART implemented a new rate peg methodology to apply from the rate peg for the 2024-25 financial year

The new methodology for setting the rate peg is simpler than the old method and will result in rate pegs that more accurately reflect changes in the costs NSW councils incur in providing their current services. 

The current rate peg methodology no longer uses the Local Government Cost Index (LGCI) which was previously the primary input into setting the annual rate peg from the 2011-12 financial year until the 2023-24 financial year.

Prior to the new methodology, IPART previously surveyed councils on costs for the LGCI every four years. Based on the results of the 2019 cost survey of councils, we reweighted the LGCI. For the  resulting expenditure weights, see Fact Sheet - Reweighting of Local Government Cost Index. For more information about the 2019 cost survey, please see Fact Sheet – Local Government Cost Index Survey 2019.

The reweighted LGCI was used to calculate the rate peg from the 2021-22 financial year to the 2023-24 financial year.