Local Government Act 1993

If any rates or instalments are not paid on or before the date they fall due, a council may – impose a penalty not exceeding 10% of the unpaid rate or instalment; or charge a daily interest not exceeding the prescribed percentage in respect of the unpaid rate or instalment for the period during which it is unpaid; or impose a penalty and charge interest as specified in paragraphs (a) and (b).

For the purposes of subsection (1), prescribed percentage is to be calculated in accordance with the following formula:where – P is the prescribed percentage;LTB is the official ten-year long term bond rate as determined by the Reserve Bank as at the close of business on the last day of business preceding 1 March.