Council Reference Group (CRG) meeting - 12 August 2025

CRG Communique #3 2025

The Council Reference Group (CRG) met on 12 August 2025 to discuss the issues it proposed the Tribunal consider for the 2026-27 rate peg. 

The CRG continued discussion on four items raised at the June CRG meeting, as set out below: 

• Adjustments for Valuer General costs – follow on from June CRG meeting: The CRG discussed that the Valuer General costs adjustments are not sufficiently material to include in the rate peg adjustment for 2026-27. 
  It was also discussed whether a materiality test of +/- 0.1% impact be applied in checking whether future adjustments to the rate peg be considered. 
  The CRG decided to defer discussion of an adjustment for Valuer General costs to next year.
• Election costs, including by-election costs: the CRG members generally supported what was agreed to in the previous meeting, which is the option to smooth election costs over 4 years (ie. for the rate peg to include 25% of election costs each year, instead of adding a temporary adjustment for the full election costs every 4 years and removing it the following year).
  • For by-election costs, CRG members agreed that further data was required to quantify the materiality of the costs. The CRG discussed it could seek data from the Electoral Commission and consider its materiality for future rate pegs.
  • The CRG members noted it is difficult for councils to predict election costs in the current model and that large increases in cost often occur.
• Dam safety levy: An update on the Dam Safety Levy was presented following discussion at CRG meeting 2. CRG members discussed the Dam Safety Levy and its impact.
  • Preliminary estimates show that 27 councils are affected, with the potential adjustment factor to the rate peg ranging from 0.01% to 0.52% (only 2 councils more than 0.1%, 18 councils were less than 0.1%).
  • The estimates have been isolated so that dams which provide drinking water are not targeted as the costs for these dams can be recovered through water charges. Dams which are for other purposes, such as retention basins are included. LGNSW noted that they will provided oversight to confirm that IPART has correctly classified dams.
• Interment Services Levy: The CRG received an update on the impact of the Interment Services Levy, which was discussed at the previous meeting. The levy commenced for all cemetery and crematoria operators from 1 July 2024.
  • 109 of the 128 councils in NSW operate interment services. A survey of 5 councils with these facilities showed that the costs of the levy average about $600,000 annually.
  • The CRG members reaffirmed the view that the levy was a retrospective cost burden shift from state to local governments, but that the rate peg was probably not the right mechanism for correcting the problem.

The CRG then continued to discuss other priority items identified at the April CRG meeting this year: 

• Employee Costs in the Base: The CRG discussed the impact of employee and staff costs to the rate peg. The methodology used by IPART to determine the cost of employees was the main area of discussion.
  • The decision that IPART made in the rate peg methodology review was that if negotiations for Awards had not be concluded RBA forecast data for changes to Wage Price Index would be used.
  • IPART agreed to further discussion with LGNSW.
• Statutory Fees and Charges: The CRG discussed local government statutory fees and charges for services and the financial impact of a lack of recovery of costs on general rates.
  • It was noted that there are around 180 different fees and charges levied by councils for services.
  • The CRG discussed the financial impact of charges for these services not being indexed, particularly that the burden is being shifted to ratepayers and that this creates a disconnect from the user pays principle.
  • The CRG also noted that the rate peg was likely not the best means of addressing the issue.
• Comparison of council rates with other jurisdictions: The CRG discussed NSW council rates in comparison to Queensland and Victoria.
  • NSW average residential rates are lower than both Victoria and Queensland.
  • In discussion it was noted that the rate peg ultimately tweaks the rates base, rather than addressing whether the base is too high or too low.
• Other matters: 

The CRG discussed the importance of cyber security systems. For the next meeting some materials should be prepared/presented on the impact of cyber security on councils as well as the cost of cyber security insurance.

Next steps

IPART Chair thanked CRG members for their contribution. IPART Secretariat will schedule the next CRG meeting after the rate peg for 2026-27 is released. 

Council Reference Group members and attendees

In attendance at the Council Reference Group meeting on 12 August 2025

• Andrew Butcher, President, NSW Revenue Professionals
• Chris Bowyer, Acting Manager, OLG Performance Team
• David Reynolds, CEO, Local Government NSW
• George Cowan, General Manager, Narrandera Shire Council
• Ian Clayton, Manager Property and Revenue, Mid-Western Regional Council
• Kevin Nguyen, Office of Local Government (observer)
• Richard Sheridan, Chair of the Local Government Finance Professionals Network, and Director City Performance, Bayside Council
• Seon Millsteed, Revenue Accountant, Tamworth Regional Council
• Shaun McBride, Chief Economist, Local Government NSW
• Wayne Rogers, Director Corporate Services, Blacktown City Council