IPART has released its Final Report on our review of the rate peg methodology
We have made the decision to make major changes to the rate peg methodology to apply from the rate peg for the 2024-25 financial year and recommended the NSW Government commission an independent review of the financial model for councils in NSW.
The new method 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. We will use forward-looking measures of councils’ base costs, and our changes also better capture the diversity of councils across the State.
Our new rate peg methodology is designed to respond to many of the issues raised in consultation. But it cannot address all the issues people have highlighted during the consultation. The rate peg cannot adequately address the efficiency or sustainability of the cost base of councils.
The Tribunal believes it would be timely for the NSW Government to initiate an independent investigation into the financial model for councils in NSW, including broader issues highlighted in consultation throughout this review.
IPART thanks ratepayers and councils who have given feedback in our review of the rate peg methodology. Our consultation included input from councils and ratepayers through workshops, focus groups, submissions, and a public hearing. We received more than 169 submissions to the issues paper and draft report and there were nearly 3,400 responses to the survey of ratepayers. The consultation has been very helpful, and we have made major changes to IPART’s rate peg methodology as a result.
We will release the rate peg for the 2024-25 financial year in mid to late November 2023.