NSW councils misconduct under spotlight

NSW councillors should be hit with hefty financial penalties when they fail to declare conflicts of interest and they should face prosecution for breaches of their oaths of office, an inquiry has found.

The independent review of NSW councillors' accountability came after a series of investigations into council engaging in corrupt conduct.

It has also called for the an independent councillor conduct commission.

Local Government Minister Wendy Tuckerman released the report on Tuesday, saying it represents the biggest changes to local government integrity measures in more than 30 years.

The review, by former Logan City general manager Gary Kellar, contains 49 recommendations aimed at improving the integrity, transparency and accountability of the state's more than 1200 councillors.

Recent Independent Commission against Corruption (ICAC) public inquiries into various councils show that trust from the community in local government had been lost, Ms Tuckerman said.

"The people of NSW expect their elected representatives to uphold the highest standards of behaviour and anyone who breaches that trust should face the consequences," she said.

Recent investigations into councils have included finding a former City of Botany Bay Council senior official corrupt over $5.6 million in false invoices and credit card misuse in 2017, and Georges River and Hurstville councillors accepting lavish trips overseas from property developers in 2022.

Last month a parliamentary inquiry was announced to examine claims of impropriety at Canterbury-Bankstown Council after disaffected ex-Labor MP Tania Mihailuk used parliamentary privilege in September to air her concerns about the integrity of mayor Khal Asfour.

Ms Tuckerman said the recommendations were the result of extensive consultation with the sector and aligned with broader integrity reforms agreed to by the government following ICAC's report on Operation Witney, involving former Liberal MP John Sidoti.

The disgraced one-time frontbencher was suspended from parliament after the state's corruption watchdog found he engaged in serious corrupt conduct.

The MP was investigated amid allegations he lobbied local councillors to rezone blocks at Five Dock in Sydney's inner west, where his family owned property between 2013 and 2017.

Mr Sidoti said in August he intends to fight to clear his name in the Supreme Court.

Local Government NSW president Darriea Turley said the local government sector supported any move that would ensure the highest standards of integrity and probity across all levels of government.

"The overwhelming majority of councillors do the right thing, but in very rare instances of misconduct it is essential that we have an appropriate framework in place that can respond in an efficient and fair manner," he said.