from essential infrastructure to other projects’, especially outlays on services’ better provided by private firms. ‘marginal Two additional arguments for rate-pegging were advanced in the Independent Inquiry into the Financial Sustainability of NSW Government. Firstly, compared with other Australian local government systems, NSW rate-pegging had been effective in its primary aim of restraining increases in rates. Secondly, rate-pegging had obliged NSW councils to become more efficient, especially in limiting overheads and administrative costs. Dollery, and Byrnes proposed a public choice case for rate-capping in Australian local government. Drawing on Wittman, they argued that the ubiquity of government ‘local failure’ in Australia had simulated a demand by ratepayers for strict regulatory oversight of councils by state regulatory agencies, especially in financial matters. Accordingly, in NSW rate-capping, institutions will form an agency ‘“watchdog” relationship with local government voters to demystify fiscal illusion by monitoring council revenue and expenditure decisions on behalf of voters’. However, rate-pegging in NSW has also come under sharp criticism. For example, IPART has pinpointed four lines of attack: it councils’ capacity to provide local services, it ‘limits prevents backlogs from being addressed’, it has ‘infrastructure caused municipalities to impose user pays charges which ‘higher could result in pricing inequities, and it runs counter to ‘local democracy’. The NSW Local Government and Shires Association now – known as Local Government NSW proposed a more general – argument against rate-pegging. In particular, rate-capping has created expectations about maximum rate increases, ‘public placing political pressure on councils to stay within the limit and not seek special variations’. Similarly, rate-pegging enables NSW local councils to engage in politically expedient ‘blame
from essential infrastructure to other projects’, especially outlays on ‘marginal services’ better provided by private firms. Two additional arguments for rate-pegging were advanced in the Independent Inquiry into the Financial Sustainability of NSW Government. Firstly, compared with other Australian local government systems, NSW rate-pegging had been effective in its primary aim of restraining increases in rates. Secondly, rate-pegging had obliged NSW councils to become more efficient, especially in limiting overheads and administrative costs. Dollery, and Byrnes proposed a public choice case for rate-capping in Australian local government. Drawing on Wittman, they argued that the ubiquity of ‘local government failure’ in Australia had simulated a demand by ratepayers for strict regulatory oversight of councils by state regulatory agencies, especially in financial matters. Accordingly, in NSW rate-capping, ‘“watchdog” institutions will form an agency relationship with local government voters to demystify fiscal illusion by monitoring council revenue and expenditure decisions on behalf of voters’. However, rate-pegging in NSW has also come under sharp criticism. For example, IPART has pinpointed four lines of attack: it ‘limits councils’ capacity to provide local services, it prevents ‘infrastructure backlogs from being addressed’, it has caused municipalities to impose ‘higher user pays charges which could result in pricing inequities, and it runs counter to ‘local democracy’. The NSW Local Government and Shires Association – now known as Local Government NSW – proposed a more general argument against rate-pegging. In particular, rate-capping has created ‘public expectations about maximum rate increases, placing political pressure on councils to stay within the limit and not seek special variations’. Similarly, rate-pegging enables NSW local councils to engage in politically expedient ‘blame
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