Overview
The reforms are intended to reduce pressure on council rates by focusing councils on core services, increasing transparency and accountability and removing or amending outdated legal requirements.
System change is being made through two Bills:
- the Local Government (System Improvements) Amendment Bill – introduced into Parliament in August 2025 and expected to become law in December 2025
- a second, currently unnamed, Bill to give effect to any decisions to cap rates – expected in early 2026.
Key changes
- A refocus of the role of local government
The Government intends to amend the purpose of local government to focus the sector on the cost-effective provision of local infrastructure, local public services and regulatory functions. All references to community wellbeing are to be removed from the statutory purpose of local government and elsewhere in the Local Government Act.
The Government also intends to set out a list of core services in legislation.
- Better measuring and publicising council performance
Councils would be required to report against a set of measures of non-financial performance set by the Government. This builds on an existing requirement to report against a set of measures relating to roads, flood protection and water services. Councils will also be required to group their activities in common ways for reporting purposes, therefore improving the ability to compare results between councils. The first set of these was released in July 2025.
- Clarifying expectations of elected member’s conduct
Elected members will follow a single, DIA-set code of conduct and standing orders (currently set by individual councils).
Expectations of behaviour will be clearer, emphasising collaboration and freedom of expression.
The contract limit before disqualification increases from $25,000 to $100,000 per year.
- Capping rates
A legal limit will be set on rates increases. The Government will announce further details before Christmas 2025.
Implications for local government
Councils will need to review their services to ensure that they meet the purpose of local government and that they are being provided in a way that is most cost-effective for households and businesses.
A government set limit on rates may see councils review the services they provide and the standards to which they provide them (for example, the opening hours for recreational facilities and libraries).
Latest Government updates
16 December 2024 – Announcement from Local Government Minister Simeon Brown about reforms
Government getting local government back to basics
Resources on local government policies can be found on the Department of Internal Affairs website.
Latest Taituarā updates
Taituarā is actively supporting the sector through these reforms by:
Advocacy and submissions
Lodged a formal submission on the Local Government (System Improvements) Bill advocating for the retention of the present purpose of local government and supporting a strengthened code of conduct for elected members.
Lodged a formal submission, and have worked with the Local Government Commission to develop a draft code of conduct.
Advised the Minister of Local Government of opportunities to improve legislation through briefings to the Incoming Minister.
Webinars and forums
Hosted a range of webinars that cover this package of change – including:
Rate-Capping What Can NSW and Victoria Teach Us
Hitting Reset: the Systems Improvement Bill Explained
Guidance
Taituarā guidance on long-term planning and some governance matters are being updated to reflect these changes
Taituarā will continue to support councils through these changes, providing guidance, resources, and opportunities for collaboration. Contact our Sector Readiness team.
Resources
Check our Events and Learning page for any upcoming webinars on this topic.
Check our Recorded Webinars page for discussions covering this topic.
