The changes includes giving councils more options to set different residential rates within their local communities, such as the introduction of new rating categories for environmental and vacant land.

Pensioners could also benefit with the current pensioner concession proposed to be replaced with a rate deferral scheme operated and funded by the NSW Government.

For those like Western Plains Regional Council who have gone through an amalgamation, it has been recommended that a choice be given to keep existing rate structures, equalise rates across the pre-merger areas or mote to a different rate structure after the freeze period ends. 

IPART chairman Peter Boxall said the changes were designed to improve the equity and efficiency in the way rates are raised from different groups of ratepayers. 

“The draft report recognises that councils need more options when setting rates to respond to the changing needs of their communities, but that household rate on average should not  rise in real terms without a comparable increase in services or infrastructure,” Dr Boxall said.

“As such, the draft recommended changes to the rating system are designed to ensure rates better reflect community preferences and the local services provided, increase transparency and accountability, better target rate exemptions, and provide more consistent support for ratepayers in need.” 

The review has been welcomed by Local Government NSW (LGNSW).

LGNSW president Keith Rhoades said the report recognised that councils needed more options when setting rates if they were to meet the changing infrastructure and service needs of their communities.

“The sector is certainly encouraged by many of these recommendations, particularly those designed to lift rate exemptions from commercial and profit-making enterprises on what is currently unrateable land,” Cr Rhoades said.

However, he said the proposed changes did not reflect the core issue facing councils, which was how to fund the services and infrastructure communities’ demanded while being squeezed at both ends by rising costs and capped revenue.

Submissions on the draft recommendations are being sought by IPART until October 14. Final recommendations will be provided to the NSW government in December 2016.

The report is available at www.ipart.nsw.gov.au.