Murray River Council is calling on the NSW Government to urgently address the growing burden of cost shifting onto local government, following the release of a new report showing councils are now carrying an additional $1.5 billion in costs imposed by other levels of government.
At this month's meeting, Council considered a Mayoral Minute on Local Government NSW's July 2025 report, produced by independent consultants Morrison Low, which examines cost shifting in the 2023/24 financial year.
The report reveals that the financial burden on councils has increased by approximately $140 million since the last report in 2021/22, when the cost shift was estimated at $1.36 billion.
Mayor, Cr John Harvie said the financial sustainability of councils across NSW was at a critical juncture.
"Our communities deserve better," Cr Harvie said.
"The decades-long practice of cost shifting is continuing to undermine the financial sustainability of the local government sector. This must stop."
The report highlights the 'Top Five Cost Shifts' onto NSW Councils, including:
- Forced rate exemptions: Councils are required to exempt profit-driven state-owned corporations and other organisations from paying rates, even though they use and benefit from local government services and infrastructure.
- The waste levy: The waste levy is an invisible NSW Government tax on ratepayers. The waste levy is a levy paid by waste facilities in metro and regional areas to the NSW Government.
- Development assessment and regulatory functions: Councils incur costs of increased regulatory responsibilities that are not fully funded by fees and charges. The most significant regulatory function cost shift is for assessing development applications. Development assessment fees are set by the NSW Government and are generally set well below the actual cost for this function.
- Emergency services contributions and obligations: Councils are required to fund 11.7 per cent of the cost of the NSW Government's emergency services in addition to other financial obligations.
- Library funding: With the NSW Government now funding just 6% of library costs, leaving councils to cover an additional $181.8 million to meet community needs.
The November 2024 report of the parliamentary inquiry into the ability of councils to fund infrastructure and services also called on the NSW Government to identify opportunities to reduce cost shifting to local government.
"Both Federal and State Parliamentary Inquiries have recognised cost shifting as one of the most significant contributors to the financial concerns of local government," Cr Harvie said.
"It is essential that the NSW Government urgently seeks to address cost shifting through a combination of regulatory reform and appropriate funding."
Following its review of the report, Council resolved to write to the NSW Premier, the Treasurer, and the Minister for Local Government to seek urgent action on this issue.
The full LGNSW cost shifting report can be accessed via Council's website.
