6 February 2024

Welcome to an exciting but challenging year

A warm welcome to the whole local government family at the beginning of what promises to be an exciting, yet challenging year for the sector.

I hope you all had a safe and enjoyable festive season with your loved ones and are ready to hit the ground running for our communities.

The issues for our advocacy will be varied, from the new density planning decree from the State Government, to the Red Fleet, the Emergency Services Levy, the rate peg and financial sustainability review as well as all the issues yet to arise.

We will be ready to serve you as always.

Review of financial model – Draft TOR now available for comment

Last week I cautiously welcomed the launch of the Review of the NSW Council Financial Model, with the release of the draft Terms of Reference for comment.

The review, to be conducted by IPART, delivers on the Government’s election commitment to undertake this review to address financial sustainability concerns.

It will assess the resources currently available to councils, their capacity to cover ongoing expenses and ability to fund core council services and infrastructure for their communities. It will also identify ways to improve budgetary performance and accountability within the sector in a context of increasing cost-of-living pressures on ratepayers.

Financial sustainability has long been a primary advocacy priority of LGNSW and was a focus of LGNSW’s 2023 election priorities, so we are pleased to see this initiative progress. The financial sustainability of councils has been undermined by rate-pegging, cost shifting onto local government, and state and federal funding arrangements that are no longer fit for purpose.

Submissions on the draft Terms of Reference will be accepted until 15 March 2024. This consultation is primarily a question of whether anything should be added to, or deleted from, the draft Terms of Reference.

While welcoming the review, I am concerned that the draft Terms of Reference contain some gaps, including consideration of external cost drivers such as cost shifting and the wide differences in revenue-raising capacity between councils.

LGNSW would particularly like to hear council views on the draft Terms of Reference. Please provide any comments to Shaun McBride, Chief Economist, at [email protected] by 1 March 2024.

NSW Government’s proposed planning reforms

I wrote to all mayors, councillors and general managers last week regarding the NSW Government’s significant and wide-ranging reforms to the planning system, which seek to override the planning controls of councils across NSW.

As the cumulative impacts of these reforms emerge, LGNSW has received feedback from councils expressing concern at the implications for amenity, safety, the environment and the carrying capacity of roads, services and infrastructure.

LGNSW has heard examples from councils describing how these blanket reforms will:

• Have adverse impacts on accessibility of services and infrastructure as populations increase demands on roads, transport, parking, schools, parks and recreation facilities, and overshadow public land, all in the absence of any of the strategic planning to determine where greater density is most suitable.
• Overwhelm the carrying capacity of evacuation routes and disregarding potential impacts of greater density in some of the most disaster-prone areas of NSW.
• Heighten land use conflict as greater density is imposed on sensitive land adjacent to critical infrastructure and employment zones.

These are the predictable consequences of one-size-fits-all approaches that disregard the carefully considered strategic planning work of councils in close consultation with their communities.

Incremental and ad hoc reforms cumulatively add to a concerning trend of erosion of decision-making by local government and potentially undermine adopted strategic plans.

The NSW Government’s own data shows that councils have continued to approve 97% of all DAs for more than a decade, and met 2022/23 state housing targets for council-led planning proposals. We also know there are significant approvals already in place that are not being developed. These could realise thousands of new dwellings if the NSW Government took action to immediately incentivise their start and address the broader industry and market barriers to housing supply, which are beyond the control of councils.

LGNSW is making a submission in response to the proposed Low and Mid Rise Housing Reforms, which are on exhibition until 23 February 2024, informed by resolutions of our Annual Conference and feedback from you, our members.

The current proposals lack the detail and transparent evidence that should be made available for full public debate and comment. Combined with the pace of the proposed changes, this has led to concerns about how the proposals would work in practice. 

As we continue our representations to the NSW Government, we would greatly appreciate further examples and case studies from your councils that demonstrate the impacts the proposed reforms will have on your communities, and set out why local input is so important.

Please email any responses or questions to [email protected] by 20 February 2024. 

Cost shifting – template and mayoral minute

Following on from the release of our cost shifting survey late last year, identifying a total cost shift to councils of $1.36 billion for 2021-22,  LGNSW has prepared template mayoral minutes and letters calling on the NSW Government to address cost shifting onto our sector.

Cost shifting now amounts to the equivalent of more than $460 per ratepayer annually and has imposed a cumulative burden of more than $10 billion on our sector over the past decade.

It’s critical that the review of the financial model for local government considers and makes recommendations to address cost shifting as well as other threats to the financial sustainability of our sector.

Cootamundra-Gundagai Regional Council de-merger roundtable

I was pleased to be able to attend the demerger roundtable hosted by Cootamundra-Gundagai Regional Council (CGRC) last week to speak on the financial sustainability challenges facing our sector and discuss first hand the challenges CGRC has experienced on its pathway to de-amalgamation.

Local democracy and local government are so important to our communities and LGNSW has a long-standing position that the NSW Government should legislate to prevent the forced amalgamation of councils without the support of a plebiscite. Our LGNSW conference has also endorsed the position that the NSW Government must pay 100 per cent of the costs of de-amalgamation of councils that were forced to amalgamate, where a referendum of residents has chosen to reverse the amalgamation.

Despite the challenging circumstances CGRC has faced, its councillors and council staff have worked tirelessly for their communities and I am hopeful that the NSW Government will work with CGRC for a fair outcome.

Applications now open - Housing Australia Future Fund

A reminder that applications for funding under the Housing Australia Future Fund Facility and National Housing Accord Facility are now open, aiming to collectively support the delivery of 20,000 new social and 20,000 new affordable homes across Australia over five years.

Councils are encouraged to apply before the deadline of 2pm on 22 March 2024. Further information, including a calendar of information sessions and the application portal, is available online.

Letter from Minister Kristy McBain

At the end of last year, the Hon Kirsty McBain MP, Minister for Regional Development, Local Government and Territories, wrote to me expressing thanks to LGNSW and to councils for the tireless work they undertake on behalf of their communities.

The Minister expressed particular gratitude for the many councils that have hosted her across NSW, and asked that I pass this thanks on to you all.

Read the Minister’s letter

I look forward to building on the collaborative relationship between our two spheres of government.

RIP Ron Higgins

We sadly learnt two weeks ago of the passing of another member of our local government family.

Councillor Ron Higgins, of Warren Shire Council, passed away on 16 January. 

Ron Higgins was a councillor with Warren Shire from 2016-2024 and a valued staff member of Warren Shire Council from 1987–2013, accumulating more than 25 years of service.

On behalf of LGNSW, I’d like to take this opportunity to acknowledge his service to the Warren Shire community.

Sincerely,

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