According to a survey of 2021-22 figures commissioned by Local Government NSW (LGNSW), council rates have attracted State Government cost shifts totalling $1.36 billion, representing an increase of $540 million or 78 percent since the survey was last carried out in 2017-18 and far exceeding historical records.

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To break down these figures, each NSW ratepayer now pays an average of $460.67 per year to State and Federal Governments through their rates, with the lion’s share of this being shouldered by rural ratepayers at $590.80 per year.

“Taxation by stealth,” is how Nambucca Valley Mayor Hoban described cost-shifts from the State Government, devoting her Mayoral Minute speech at last Thursday’s meeting to cost increases faced by NSW councils.

“Councils are the closest level of government to the community and we see firsthand the very real impact of this endless financial squeeze,” said LGNSW President Cr Darriea Turley AM in her introductory statement to the report.
“We carry the can as other governments wipe costs from their budgets by eating into ours.

“And we face the community to answer for rate increases, reduced services or degraded local infrastructure,” she said.

According to the report, the top five cost shifts onto NSW councils were the Waste Levy, rate exemptions, DA and regulatory functions, emergency services contributions (eg. RFS) and libraries.

The largest of these increases came from emergency services contributions, where from 2023-24 the State Government increased the budgets while at the same time removing the subsidy it had made to Councils for the previous increase.

Councils were not advised of this change until after they had put their own budgets on public exhibition – a cost increase of $41.2 million across the state from the previous year.

Forced rate exemptions are another form of cost-shifting, whereby councils are required to exempt government and other organisations from paying rates, effectively shifting the burden of costs they incur to ratepayers.

Many funding programs announced by State or Federal governments are to be delivered by government, but they are either not fully funded or their funding is reduced over time, leaving councils to shoulder these additional financial burdens.

An example of this is libraries.

The State Government was originally to fund 50 percent of libraries’ costs but now covers approximately eight percent, leaving councils to fund an additional $156.7 million.

On Thursday, Nambucca Valley councillors resolved to write to the Premier, the NSW Treasurer and the NSW Minister for Local Government requesting that they urgently address these costs through a combination of regulatory reform, budgetary provision and appropriate funding.

Member for Oxley Michael Kemp said all levels of Government need to “work together to adequately assist our important regional local Councils and ensure their financial viability”.

By Ned COWIE