Media Release: Rate exemption review needed to ensure equity

A report commissioned by Local Government NSW (LGNSW) has found that many rate exemptions that councils are forced to provide to commercial operations are inequitable and place an unfair burden on ratepayers.

The report was undertaken by highly respected independent analyst Deloitte Access Economics and was commissioned by LGNSW after the NSW Government announced it was undertaking a review of the Local Government Act (NSW) 1993.

The report, which has been forwarded to the Local Government Acts Taskforce, found that the exemptions councils provide under the current Local Government Act (NSW)1993 to organisations, institutions and some government business enterprises are no longer justified because the distinction between charitable, social and commercial activity have blurred. The section dealing with exemptions in the current Act were carried over from the Local Government Act (NSW) 1919.

Joint President of Local Government NSW, Cr Ray Donald, said the antiquated section in the current Local Government Act dealing with rate exemptions was no longer relevant.

“When these sections relating to rate exemption provisions were written 94 years ago, it was obviously developed for a different time,” Cr Donald said.

“The intention was to provide organisations that undertake charitable and social activities within our communities with financial relief as acknowledgement of the valuable and important work they do.”

“It is unfair on the broader community that some commercially operated enterprises that have the capacity to pay rates are receiving a rate exemption all because the Local Government Act hasn’t kept up with the times.”

Joint President of Local Government NSW, Cr Keith Rhoades AFSM, said with the NSW Government currently undertaking a review of the Local Government Act, opportunity exists to modernise rate exemption provisions.

“LGNSW has been calling for a review of rate exemptions for over a decade, and with the NSW Government now reviewing the Local Government Act, a rare opportunity exists to reform these provisions,” Cr Rhoades said.

“Deloitte Access Economics has produced a framework to assess the adequacy of current exemptions and the report recommends the removal or redesign of many of these on the basis of equity and efficiency.”

“The report validates many of the criticisms that we at LGNSW have repeatedly made about the current Act, and we call on the NSW Government to seriously consider the Deloitte Access Economics Report when reviewing the Local Government Act.”

The Deloitte Access Economics Report is available at the LGNSW website.

Media Enquiries

Cr Ray Donald                         President: 0438 699 910
Cr Keith Rhoades, AFSM      President: 0408 256 405
Alex Power                               Media and Communications Manager: 0408 603 093