Glasgow Labour group leader Frank McAveety urged his party to back a “new devolution settlement” for councils, including powers to allow them to design and implement their own taxes.
In a speech to the Scottish Labour Party conference in Dundee, Mr McAveety advocated handing local government the ability to introduce measures such as tourist taxes or compulsory sale orders for empty properties.
He said this would allow councils, which currently have four-fifths of their budgets set by the Scottish Government, to raise up to £1.6 billion in revenue when combined with Labour plans to scrap council tax.
Addressing delegates, Mr McAveety called on the party “to demonstrate its belief in the power of local government”.
He said: “Now it is time for a new devolution settlement that empowers local government.
“Not a proscribed list of new powers, but a new ability to innovate and create where local communities need it most.
“No longer command and control, but real change, real trust and real respect for local democracy.
“A settlement that empowers local government to design and implement new policies and new levies to raise a third of its own revenue.”
The former minister criticised the SNP for treating local government “with disdain and disrespect”.
He said: “When the Parliament was established in 1999 the late Donald Dewar asked me to lead on parity of esteem for local government.
“Since the SNP came to power, we have seen the absolute opposite.
“Nationalist politicians telling us what our council tax should be and stripping the powers of councils in delivering education and social work services.
“It is time to make that ‘parity of esteem’ a reality.”