Local Government Infrastructure and Services Inquiry

Image: Broken Hill from above. Courtesy: Shutterstock.

RCNSW has provided a submission to an inquiry conducted by the Standing Committee on State Development into the ability of local governments to fund infrastructure and service.

Regional cities are fundamental to the success of New South Wales. The RCNSW membership want to ensure our cities continue to be great places to live and work while easing the population squeeze in Sydney.

Our submission focused on two key areas: 

  1. The funding environment: including the current Rate Peg framework and variable nature of state and federal grant funding support, which together have created day-to-day challenges in meeting the increasing costs of services and infrastructure required to run thriving regional cities; and 

  2. The expanding delivery role: for regional city local governments to be strong regional service hubs while also accommodating a growing population in a cost-shifting environment.

The key issues raised in the submission were:

  • Ongoing under estimation of population growth in regional cities impacting service and infrastructure delivery

  • Increasing housing availability impacting the ability to deliver services;

  • Growing skills deficit that was impacting economic growth of regional cities;

  • The current rate peg methodology did not reflect the growth or service role of regional cities which was impacting the viability of the service centre role for regional cities; and 

  • Variability of government grants lead to uncertainty in the ability to develop and grow regional cities.

The Standing Committee’s report was tabled in State Parliament on 29 November, 2024, with recommendations made that reflected those advocated by RCNSW. These included:

  1. Review rate exemptions to strike a better balance between financial sustainability, community benefits and equity*; 

  2. Redesign the rating system taking into account current levers such as Integrated Planning and Reporting framework and rates benchmarking to provide local government greater flexibility and latitude to set their own rates*;

  3. Seek to improve the special variation process*;

  4. Advocate to the Australian Government to increase the federal taxation revenue distributed via Federal Financial Assistance Grants from 0.5 per cent to 1 per cent*; and

  5. Implement changes to the developer contributions framework to better financially support local councils to fund the ongoing costs*.

To read the Standing Committee’s report, click here.

To read RCNSW’s submission, click here.

*Note: summarised recommendation.

Edwina Blackburn