Real estate agents and property developers will be banned from serving on councils in NSW if an amendment to the law can get through the lower house of parliament.
A bill to amend local government law to disqualify real estate agents and property developers from holding civic office passed the NSW upper house on Wednesday.
Labor says the bill will protect the the public by banning developers and estate agents serving on local councils, where they can access planning information that the general public cannot.
Labor's local government spokesman Greg Warren says that "presents all sorts of issues in terms of conflicts of interest".
Labor banned property developers and real estate agents from nominating as its candidates for public office in 2016.
Liberal MP and former Strathfield mayor Scott Farlow is opposed to the legislation, saying he had been subject to intimidation from other councillors relating to planning decisions.
"None of those people would have been captured by the bill put forward ... they were up to nefarious things in council but were not disclosed as property developers or real estate agents," he said.
In contrast, real estate agents and property developers "are some of the most well-known people in council areas" and any decision they make attracts scrutiny, Mr Farlow said.
It's not a conflict for someone with property interests in one local government area to serve on a council in another.
"We have seen through the history of councils that some very improper, corrupt activities can be undertaken in a council area by people who are not real estate agents or property developers," Mr Farlow said.
Opposition whip in the upper house Mark Buttigieg said the government "has shown time and time again they are more interested in lining the pockets of developers" and "councillors are elected to serve their communities, not their own self interest".
He urged the government to support the bill in the lower house.
"It is essential for protecting the integrity of the decisions made by elected councils."
Shayne Mallard, another former local councillor now Liberal MLC, says the bill overreached and was poorly timed ahead of local council elections next month.
"There are currently candidates on ballots ... who nominated believing they are eligible to do so, but who may now potentially be disqualified.
"This will potentially expose councils to months of uncertainty ... preventing them from making key decisions in the critical first few months of their term," he said.
Parliament "should not be in the business of deciding who should or should not be elected to councils based on how they are earning a living", he said.
The bill has been sent back to the lower house for a vote, but whether that happens before council elections next month remains to be seen.