The following was a Mayoral Minute from the Ordinary Meeting of Council, Tuesday 13 February 2024. It was resolved that:
1. Council receive and note the findings of the LGNSW Cost Shifting report for the 2021/2022 financial year.
2. A copy of the cost shifting report be placed on Council’s website so that our communities can access it.
3. Council write to the Premier, the NSW Treasurer and the NSW Minister for Local Government seeking that they urgently seek to address these costs through a combination of regulatory reform, budgetary provision and appropriate funding.
4. Council write to the Premier, the NSW Treasurer and the NSW Minister for Local Government seeking a meeting with the Mayor, Deputy Mayor and General Manager to discuss the impacts of cost shifting in the Hawkesbury.
MAYORAL MINUTE
The pressure on councils to continue to provide services of appropriate standard to our communities is now extraordinary.
The unrelenting growth of cost shifting to councils, coupled with rate pegging, is increasingly eroding any possibility of financially sustainable local government and risking the capacity of councils to deliver tailored, grassroots services to their communities and properly deliver and maintain vital local infrastructure.
Alarmingly, the latest research commissioned by Local Government NSW (LGNSW) shows that the increase in cost shifting has been accelerated by various NSW Government policies.
As shown in the latest cost shifting report produced by independent consultants Morrison Low on behalf of LGNSW for the 2021/2022 financial year, an amount of $1.36 billion of expense has been passed on to councils to fund. This is an increase of $540 million since the last report from the 2017/2018 financial year and represents lost services, lost opportunity and lost amenity for all our residents and businesses.
On average, this represents an additional cost of $460.67 for every ratepayer across the State. With councils having to fund this ongoing subsidy for the State Government each and every year it means our communities get less or go without. They go without better roads, they go without better parks, they go without important community services that only councils provide, and they and the rate payers are effectively paying hidden taxes to other levels of government.
Councillors, our communities deserve better and this must stop. Prior to the most recent state election the then Minns Opposition wrote to LGNSW acknowledging that cost shifting had undermined the financial sustainability of the local government sector.
Now in 2024, it is important to councils and communities that the NSW Government urgently seek to address cost shifting through a combination of regulatory reform, budgetary provision and appropriate funding.
Council notes the engagement of the Independent Pricing and Regulatory Tribunal (IPART) to undertake a Review of NSW Council Financial Model, which was recommended by IPART in its report on the Review of the Rate Peg Methodology in August 2023.
This recommendation was made due to feedback received from councils on the ongoing issues of financial sustainability. It is hoped that this review will result in sound, effective recommendations that are implemented in an efficient manner by the NSW Government.
