LGNSW Cost Shifting Report - How State Costs Eat Council Rates

Published on 08 March 2024

Cost shifting remains one of the most significant challenges facing the NSW local government sector. As the peak organisation representing the interests of all 128 general purpose councils in NSW, as well as special purpose councils and related entities, Local Government NSW (LGNSW) regularly monitors the extent of cost shifting onto local government via its Cost Shifting Survey.

The 2021–22 Cost Shifting Survey has revealed that cost shifting totalled $1.36 billion in 2021–22 far exceeding historical records and representing an increase of $540 million since the Cost Shifting Survey was last carried out in 2017–18. Alarmingly, the increase in cost shifting has been accelerated by various State Government policies, with the most significant examples of cost shifting in 2021–22 being:

• The waste levy, which remains the largest single contributor to cost shifting in NSW, totalling $288.2 million, because the NSW Government did not fully reinvest the waste levy, paid by local councils, back into waste and circular economy infrastructure and programs.
•  The Emergency Services Levy and associated emergency service contributions, which totalled $165.4 million and represented the largest direct cost shift to local councils. In 2021–22, councils contributed $142 million through the Emergency Services Levy, $12.7 million through Rural Fire Service (RFS) obligations, and $10.7 million in depreciation expenses on RFS assets.
• The NSW Government’s failure to fully reimburse local councils for mandatory pensioner rate rebates, resulting in councils losing $55.2 million.
• The NSW Government’s failure to cover the originally committed 50 per cent of the cost of libraries operations, resulting in an additional $156.7 million in costs to councils.

You can read the report here(PDF, 1MB).