A Fair Go? A Response to the Independent Local Government Review Panel's Assessment of Municipal Taxation in NSW

20 Pages Posted: 29 Sep 2015

See all articles by Joseph Drew

Joseph Drew

University of New England (Australia)

Brian Dollery

University of New England (Australia) - School of Economics

Date Written: April 26, 2015

Abstract

The Independent Local Government Review Panel (ILGRP) recently handed down its final report on the financial sustainability of New South Wales (NSW) councils. The report identifies a number of problems in relation to local government rating practice and recommends that the NSW Government consider replacing the present rate‑pegging regime, changing the base from which council rates are levied for high‑density unit complexes and reducing the number of exemptions and concessions currently available. At the heart of the recommendations is an empirically untested contention that the current system of council rates in NSW is inherently inequitable in terms of both inter‑municipal equity and capacity to pay. We begin our assessment of the ILGRP claims by reviewing the theoretical foundations of council property taxes. We then provide a synoptic account of NSW municipal rating before empirically assessing equity under the current arrangements. Finally, we propose a set of public policy responses which address the equity problems identified in our analysis.

Suggested Citation

Drew, Joseph and Dollery, Brian, A Fair Go? A Response to the Independent Local Government Review Panel's Assessment of Municipal Taxation in NSW (April 26, 2015). Australian Tax Forum, Vol. 30, 2015, Available at SSRN: https://ssrn.com/abstract=2666306 or http://dx.doi.org/10.2139/ssrn.2666306

Joseph Drew (Contact Author)

University of New England (Australia) ( email )

Armidale
Armidale, New South Wales 2351
Australia

Brian Dollery

University of New England (Australia) - School of Economics ( email )

Armidale, NSW, NSW 2351
Australia
+61 02 6773 2500 (Phone)
+61 02 6773 3596 (Fax)

HOME PAGE: http://www.une.edu.au/febl/EconStud/dollery.htm

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