LOCAL Government NSW last week released a new report on cost-shifting, with the Country Mayors Association of NSW saying impacts are more deeply felt in rural, regional and remote communities.
Cost-shifting is the term given to offloading cost burdens by State and Federal Governments to already cash-starved Local Government.
The report, Cost Shifting 2025: How State Costs Eat Council Rates, was prepared by independent consultants Morrison Low and shows a 10 per cent increase in cost shifting in three years.
It also details how Councils across New South Wales are now absorbing a $1.5 billion in cost-shifting from State and Federal governments each year – a cumulative $11.3 billion over the past decade. CMA Chairman and Temora Shire mayor Rick Firman said the report indicates the cost breaks down to $500 per ratepayer, per year.
“On behalf of our CMA board, together with our 92 rural, regional and remote members, I extend our congratulations to our sister organisation LGNSW,” Cr Firman said.
“It is important that our Governments and communities understand the big picture impacts of adding to our expenses, in a time of inadequate funding for rural, remote and regional communities.
“The figures are not surprising, but they are disturbing and hopefully enlightening, as unprecedented operational cost increases in recent years and constrained income growth make financial sustainability a mission impossible for some,” he said.
“It is clear the impacts of cost-shifting are bigger barriers to financial sustainability for non-metropolitan Councils.
“Some of our rural and remote members have a small rate base that is essentially stagnant or even declining.
“More than 70 per cent of some country Councils’ revenue is grants, but that varies annually and the Federal Government’s (untied) Financial Assistance Grants are half of what they once were.
“We will continue to lobby the Federal Government to return them to one per cent of national taxation revenue, as we work to raise awareness of the ever-growing demands on rural, regional and remote councils in NSW,” he said.
Cr Firman said while CMA members feel the brunt of cost-shifting and funding reduction impacts, he is optimistic the NSW Government will make some positive decisions in the near future.
“The NSW Government’s Public Accounts Committee handed down some appropriate recommendations after its inquiry into the assets, premises and funding of the NSW Rural Fire Service.
“As one of the most inexplicable examples of cost-shifting, our Member Councils in NSW are forced by the State Government to wear the financial impacts of having Rural Fire Service Assets on their books, despite not actually owning them,’ he said.
“The ‘Red Fleet’ is something the CMA has lobbied intensively on and we acknowledge the NSW Treasurer Daniel Mookhey, NSW Emergency Services Minister Jihad Dib and NSW Local Government Minister Ron Hoenig have been working hard on resolving the issue.”
Cr Firman said country mayors were underwhelmed with the recent, seemingly western Sydney focused, State budget.
“It saw further funding cuts to local galleries and other valued community services, meaning many of our member councils will carry more financial responsibility, regardless of their capacity to absorb the costs that the State Government saves,” Cr Firman said.
“The Transport for NSW reclassification program is also to be commended. With that, we could see a good number of road maintenance burdens dumped onto Councils go back to State Government management,” he said.
