RATE pegging was introduced in the late 1970s by then premier Neville Wran as a way of keeping apparently expansive local government spending plans in check.

But a lot has changed since then and the dominant view, nowadays, is that councils need to spend more, not less, to properly discharge their functions.

Rate pegging is widely accepted as a major contributor to the parlous state of council coffers because rate increases have failed to keep pace with cost-of-living increases.

The other big problem is “cost-shifting”, whereby state and federal governments pass the responsibility for certain actions – but not the funding to do them – down to local government.

State Labor was effectively deaf to the councils although it did pass the responsibility for setting the annual rate cap to the Independent Regulatory and Pricing Tribunal.

In contrast, the incoming Coalition government announced several key changes, including a review of the Local Government Act, soon after taking office in March.

Working with the Local Government and Shires Association and others, the government has also announced what Local Government Minister Don Page has described as a “new direction” for the sector over the coming 25 years, titled Destination 2036.

Perhaps not surprisingly, Hunter mayors interviewed by the Newcastle Herald want an end to rate pegging.

While Mr Page says “everything is on the table” in the review process, he appears to be playing down the likelihood of the councils getting open slather on rates, saying recently it was wrong to think “everything would be fine” if only councils had more “financial resources”.

Mr Page says councils should co-operate more and share their resources. More controversially, the Destination 2036 documents also discuss voluntary amalgamation.

In recent years the Herald has acknowledged the difficulties that councils have faced under rate pegging.

Infrastructure backlogs in Newcastle and Lake Macquarie, especially, require many tens of millions of dollars that the organisations do not have.

But Newcastle, in particular, has hardly covered itself in glory recently, as the Laman Street fig debate makes all too clear. In such a climate, the councils must prove to the public they can be trusted with the power they are seeking.

Ring the registers

FOR most of us, Christmas came on Sunday.

But for the Hunter’s struggling retailers, the celebratory spirit begins this morning with the delayed start of the annual Boxing Day sales.

It has been a tough year for retailers with global financial uncertainty and the online onslaught.

Pre-Christmas sales volumes were reportedly flat but more and more of us are delaying our purchases, nowadays, until Santa goes and the prices come down.

The sleigh bells might have stopped.

But the cash registers are just starting.