LGNSW savages cost shifting

Local Government New South Wales has blasted continued cost shifting to the state’s local government sector, releasing figures that show as much as $820 million dollars in service costs have been shifted to local government expenditures.

"Cost shifting is one of the most significant problems faced by council in NSW and our research shows it is increasing at an accelerated rate,” Local Government NSW President Linda Scott said.

“This trend is being driven largely by State Government policies, and it is eating into council revenue by up to 17 per cent each year.”

Cost shifting occurs when state and federal governments force councils to assume responsibility for infrastructure, services and regulatory functions without providing sufficient supporting funding.

Clr Scott said the hardest-hit regional and rural councils in NSW included:

  • Cessnock City Council (16% of income)

  • Maitland City Council (16% of income)

  • Shellharbour City Council (12% of income)

  • Wollongong City Council (11% of income)

  • Dungog Shire Council (9.5% of income)

  • Inverell Shire Council (7% of income)

  • Muswellbrook Shire Council (6% of income)

“One of the most appalling examples of cost shifting is the NSW Government’s waste levy, which increased councils’ costs by 44% over a two-year period,” she said.

“Last year, the NSW Government collected a total of $727 million in waste levies from councils, business and individuals. $300 million is collected from councils alone, and of this just 18% is returned to local government to actually manage waste.

“Where has the rest gone? Treasurer Dominic Perrottet boasts of a budget surplus, but he’s a little less forthcoming about the fact that some of that surplus is only possible because the State Government shoves an ever-increasing amount of costs downstream to local government.

“It’s common for the Government to make a big splash about one-off funding for local infrastructure, but then the council has to absorb the cost of maintaining that infrastructure for years to come.”

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