Each NSW ratepayer is being short changed by around $500 a year thanks to cost shifting by the NSW and Australian Governments.
A damning independent report commissioned by Local Government NSW (which represents all NSW councils) shows NSW councils are absorbing a staggering $1.5 billion in cost shifting from the higher levels of government.
Cost shifting is when the NSW and Australian Governments force councils to take on new responsibilities for infrastructure, services and regulation without sufficient funding, including:
- Forced rate exemptions for state-owned corporations
- NSW Waste Levy collected through waste management fees
- Development assessment fees set well below the costs of these functions
- Councils funding more than 11% of the Emergency Services Levy
- Councils funding more than 90% of library costs
Kiama Mayor Cameron McDonald said the result of cost shifting locally was that up to $500 of the rates paid by local ratepayers each year is being diverted from core council services to support the responsibilities of higher levels of government.
"Local councils are required to provide more and more services that they aren't funded to deliver. The cost is ultimately borne by ratepayers who quite rightly expect their rates to be providing for local services, not cost shifted services" Cr McDonald said.
"Here in Kiama, we are diligently working through a Performance Improvement Order, all the while trying to keep the roads sealed, the grass mowed and our libraries and pools open".
"This Report is a significant wake up call for the higher levels of government. I encourage you to read it. Many councils are at breaking point. To be financially sustainable, we cannot keep paying someone else's credit card bills."
LG NSW has called on the NSW Government to commit to genuine reform, including regulatory changes, proper budget support, and fair funding.
