Council Urges NSW Government Action on Cost Shifting

Published on 28 February 2024

At the Ordinary Council meeting held on Wednesday 28 February 2024, Mayor Cr Stephen Allan moved a motion Mayoral Minute addressing the pressing issue of Cost Shifting onto Local Government. The meeting saw a pivotal discussion on the findings of the LGNSW Cost Shifting report for the 2021/2022(PDF, 1MB)  financial year.

The report highlighted alarming trends indicating the unyielding burden placed on councils due to escalating cost shifting from the state government. The worrying trend has been a concern of Councillors for some time, with Mayor Cr Allan emphasising the urgency of the situation. The relentless growth of cost shifting was a key discussion point, which coupled with rate pegging, poses a significant threat to the financial sustainability of local government entities.

“The latest research by independent consultants Morris & Low that examined the 2021/2022 financial year shows an alarming $1.36 billion of expenses that have been passed on to local government in that year alone, from State and Federal governments,” Mayor Cr Allan said.

This additional cost represents an increase of $540 million since the previous report in the 2017/2018 financial year.

On average, this equates to an additional cost of $460.67 for every ratepayer across the state. Such financial strain not only compromises the ability of Councils to provide essential services and maintain vital infrastructure, but also results in lost opportunities and diminished amenities for residents and businesses alike.

Mayor Cr Allan underscored the gravity of the situation, stating: "Cost shifting really restricts our Council’s capacity to deliver services of appropriate standards to our community and to maintain vital local infrastructure. It is our community that is suffering as a result. Our communities deserve better, and this must stop.”

He further urged the NSW Government to take immediate action through a combination of regulatory reform, budgetary provision, and appropriate funding.

In response to these pressing concerns, the Council passed the following recommendations:

• Receive and note the findings of the LGNSW Cost Shifting report for the 2021/2022 financial year
• Place a copy of thereport on Council’s website to ensure accessibility for our communities
• Write to the Premier, the NSW Treasurer, and the NSW Minister for Local Government, urging them to urgently address cost shifting through regulatory reform, budgetary provision, and appropriate funding
• That Council remains committed to advocating for the interests of its residents and will continue to work tirelessly to ensure sustainable local governance.