LGNSW election priority focus: Financial sustainability
The financial stability of NSW councils has never been more at risk than it is today.
For decades, we’ve been undermined by poor rate-pegging methodology, cost shifting, and state and federal funding arrangements no longer fit for purpose.
Add the cumulative financial impact of successive natural disasters and the COVID pandemic and it is no surprise that council budgets are at absolute breaking point.
Cost shifting, in which councils are forced to take on additional responsibilities without additional funding, has reached up to $1 billion a year – about 20% of all council revenue that would otherwise be available to provide and maintain essential infrastructure and services.
Our emergency services need a strong funding base, but current arrangements are neither equitable nor sustainable. Councils are struggling with steep annual increases in the cost of the Emergency Services Levy which, in some instances, grows faster than the increase allowed under the rate peg.
Councils are also being set up to fail their annual financial audits because of the nonsensical position that they should recognise the depreciation cost of RFS mobile assets – assets for which they have no say over the acquisition, use or disposal.
Trust in the fair and equitable allocation of grant funding has been eroded to an all-time low, with no guarantees taxpayer dollars are invested where they are most needed, regardless of political representation.
LGNSW is calling on all candidates and parties to commit to:
- Amending the rate peg methodology to prevent future financial shocks to the sector and to ultimately remove rate pegging.
- Continuing the rebate of increases in the Emergency Services Levy (ESL) contributions by councils, with the eventual replacement of the levy by a broad-based property tax.
- A public inquiry into cost shifting in NSW and action to help end this phenomenon and its ever-increasing impact on the financial sustainability of local government.
- Legislation to make clear that Rural Fire Service mobile assets are vested in the Rural Fire Service..
- Fairness, transparency, integrity and certainty of grant funding to councils.
Download LGNSW’s 2023 State Election Priorities
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