Council Reference Group Communique #2 2026 

The Council Reference Group (CRG) met on 29 June 2026 to discuss issues it proposed the Tribunal consider for the 2027-28 rate peg. 

The CRG focused on inflation and fuel cost pressures, technical aspects of the rate peg calculation, and updates on emerging workstreams, as set out below.

Inflation catch-up and fuel costs: The CRG considered 2 related issues of rising fuel costs and whether differences between forecast and actual inflation should be reconciled. It was noted that fuel costs and their indirect impacts are already reflected in broader price indices used in the rate peg framework. Three broad options were discussed:

  • introducing a CPI/PPI-based true‑up mechanism to reconcile forecast and actual outcomes
  • applying a temporary adjustment to reflect fuel cost spikes
  • applying existing forecast assumptions without adjustment.

The CRG considered trade-offs across the options. A true‑up approach was generally seen as more evidence-based and capable of reflecting actual inflation outcomes, albeit with a 2-year lag, while temporary adjustments raised considerations regarding volatility of upward and downward adjustments, implementation complexity and alignment with the broader rate peg framework. 

There was also acknowledgement that fuel-related cost pressures extend beyond direct fuel use into construction and materials, though capturing these fully would be complex and could perhaps be most cleanly achieved by means of an inflation true-up.

The CRG agreed that further consideration is required and to revisit this at the next CRG meeting. 

Rounding of the rate peg: The CRG reviewed the current practice of rounding the rate peg to 3 decimal places. Values that are 0.05% or more, rounds up to 0.1%, less than 0.05% rounds down to 0.0%. 

IPART explained its rounding approach in the rate peg and presented analysis that indicated rounding effects are small and have historically produced mixed outcomes across councils.

The CRG supported recommending to the Tribunal to retain the existing approach.

Rounding of the statutory limit on the minimum rate: The CRG considered whether rounding statutory minimum rates to the nearest whole dollar remains appropriate. The CRG observed that rounding can result in small cumulative differences over time and may affect the distribution of rates between minimum and ad valorem ratepayers.

The CRG supported recommending to the Tribunal the benefits of improving precision and moving toward rounding to the nearest cent as a more accurate and transparent approach. 

Materiality rule: The CRG revisited the existing materiality threshold used to determine whether adjustments should be included in the rate peg. The current approach requires a materiality of at least +/-0.1% for an item to be considered.

The CRG supported recommending to the Tribunal to continue the current materiality threshold, while allowing for reconsideration if needed on a case-by-case basis.

Climate adaptation costs: IPART updated the CRG that it received correspondence from the Minister for Local Government referring to IPART a request from a council for consideration of climate adaptation costs within the rate peg framework. 

The CRG noted that a representative from the CRG will present on this at the next CRG meeting. 

Cyber security update: IPART provided an update on the cyber security work undertaken by the Centre of International Economics (CIE), engaged by IPART.  The CIE has developed a draft survey to collect cybersecurity information from councils, for the purpose of considering a potential rate peg adjustment. The CIE is seeking feedback from CRG volunteers on the draft survey design. 

The survey is expected to be distributed to councils in July, with results to be analysed and presented at the next CRG meeting.

Next steps

IPART Chair thanked CRG members for their contribution. 

The next CRG meeting is on 11 August 2026.

See: Meeting agenda.

Council Reference Group members and attendees

In attendance at the Council Reference Group meeting on 29 June 2026:

  • Andrew Butcher, President, NSW Revenue Professionals
  • Daniel Pretzler, Chair of the Finance Professionals Member Network
  • David Reynolds, CEO, Local Government NSW
  • Danielle McVernon, Local Government Professionals (in place of Vicki Mayo)
  • Glen Magus, Director of Corporate Services, Hornsby Council (in part)
  • Kerryn Conroy, Office of Local Government (in place of Tina Baldock)
  • Ian Clayton, Manager Property and Revenue, Mid-Western Regional Council
  • Julie Briggs, Policy Advisor, Country Mayors Association of NSW
  • Ritika Babbar, Senior Performance Analyst, Office of Local Government
  • Seon Millsteed, Revenue Accountant, Tamworth Regional Council
  • Shaun McBride, Chief Economist, Local Government NSW
  • Wayne Rogers, Director Corporate Services, Blacktown City Council (in part)