NSW may no longer be the only state in Australia to place a cap on local government rates, with NSW Premier Nathan Rees promising the removal of rate pegging at the Local Government Association Annual Conference in Broken Hill. 

"If it represents your united view, and is backed by your communities, and it meets the tests I’ve just outlined, then we’ll give it a very serious consideration," he said.

Mr Rees also acknowledged that NSW councils have some of the lowest rates in the country.

Until recently, the NSW Government has repeatedly ruled out removing the policy, which local government has long suggested suggests limits councils’ ability to draw funds for community infrastructure and service delivery.

The Local Government and Shires Associations of NSW (LGSA) welcomed the move, saying it would enable local government to provide better services.  

“The Premier has proved he is committed to better services and facilities for NSW residents and a positive relationship with local government by considering the removal of rate pegging,” LGSA president Genia McCaffery said.

“Rate pegging makes it difficult for local councils to build the roads, footpaths and playgrounds our communities need.”

Cr McCaffery said councils “couldn’t agree more” with Mr Rees’ argument that the removal should accompany community support and a guarantee of improved services.

“Councils would rate fairly and based on local needs – and if they didn’t they would face the wrath of their communities at the ballot box,” she said.

NSW Opposition leader, Barry O’Farrell also made a raft of commitments at the conference, including an Inter-Governmental Agreement (IGA), a return of Part 3A planning decisions to councils, an end to cost shifting and to the ‘historic abuse’ by the state government on to local councils.

“The penny has dropped at a state level that councils make our communities work, and that government needs to work with us and support us if they are serious about their constituents,” Cr McCaffery added.