On average the 128 councils in NSW raise about a third of their revenue through rates. The Independent Pricing and Regulatory Tribunal of NSW (IPART) determines how much each council’s total rates revenue can increase each year through the rate peg. Over the last year, IPART has consulted widely with ratepayers, councillors, council staff and other stakeholders across NSW about council rates. Their consultation has been an important part of IPART’s review of the rate peg methodology that has been used to calculate the rate peg each year since the then Minister for Local Government delegated this responsibility to IPART in 2010.

The Tribunal resolved to undertake this review of the rate peg methodology when the very low rate peg for the 22-23 financial year coincided with rapidly increasing inflation. This situation demonstrated that aspects of the way IPART calculated the rate peg were not suited to a volatile economic climate.

IPART has completed a review of our methodology for setting the rate peg – that is, the maximum amount in percentage terms by which a council may increase its general (or rates) income in a year. IPART conducted the review to develop a new methodology that:

• allows councils to vary their general income annually to reflect (as far as possible) changes in the costs of providing local government goods and services due to inflation and other external factors
• continues to include a population factor.

This Final Report outlines IPART's decisions on the new methodology and explains how this will be implemented.