The Premier has asked IPART to recommend a robust methodology for allocating the costs incurred by the NSW Electoral Commission (the NSWEC) in administering local government elections. The costing methodology is required to minimise the financial burden on councils and ratepayers, while also encouraging the NSWEC to provide its election services in an efficient and cost-effective way. We are also required to have regard to a range of other factors, including the market for electoral services in which the NSWEC operates (see the full Terms of Reference at Appendix A).
We have achieved this by first identifying the efficient costs of the NSWEC providing local government election services and then used our impactor-pays funding hierarchy to allocate these costs between the NSW Government and councils, and amongst councils.
Our funding hierarchy promotes cost-reflective pricing, so that councils pay for the efficient cost of the election services they receive from the NSWEC. We consider it is important that the NSWEC’s prices to councils are cost reflective, as this will help to:
- Ensure the NSWEC’s costs are transparent and subject to appropriate scrutiny
- Promote efficient decisions over time by councils in relation to the provision of election services, and
- Ensure that the NSWEC is not unduly advantaged or disadvantaged in competing with private providers of election services (and thus help to facilitate competition in the provision of election services, and the efficiency gains over time associated with such competition).
Our funding hierarchy is also practical. It recognises that in some cases it may not be possible to set purely cost-reflective prices, and that some costs may need to be allocated to the NSW Government (or NSW taxpayers) on behalf of the broader community, on the grounds that it may not be administratively efficient or practical (ie, it is too difficult or costly) to allocate costs to impactors or beneficiaries.