RATE-PEGGING IN NEW SOUTH WALES LOCAL GOVERNMENT Brian Dollery· Centre for Local Government University of New England 1. INTRODUCTION New South Wales (NSW) is alone amongst Australian states and territories in employing a policy of rate-pegging designed to limit increases in property taxes that can be levied by local councils in that state l . This longstanding policy has been an ongoing source of bitter controversy in NSW itself and the cause of much bemusement in the broader Australasian local government community (Dollery, Crase and Johnson, 2006). While NSW had employed a form of rate-pegging between 1901 and 1952, which was discontinued due to it s 'impracticality' (NSW Local Government and Shires Association, 2008, p.16), the genesis of the modern method of rate-pegging may be found in the 1976 state election campaign. Under the Local Government (Rating) Further Amendment Bill, an interim type of rate-pegging was re-introduced by the victorious Wran Labor Government in 1977 and further refined into its contemporary form in 1978. The timing ofthe introduction of rate-pegging legislation into the NSW Parliament shou ld be seen against the hi storical backdrop of economic developments in NSW in the 1970s; over the period 1973 to 1976, rates had increased on average by 188 per cent whereas average weekly earnings over the same • Director of the UNE Centre for Local Government , School of Business, Econom ics and Public Policy, University of New England, Armidale, NSW 2351.Telephone: 61 26773250; Fax: 61 267733596; Emai l: bd o ll ery@une.edu.au I The Northern Territory wi ll join NSW in imposing rate-pegging for a transitional three-year period beginning 2008 wh il e extensive structural r eform is put in place (Productivity Comm ission, 2008, p.97). I