Councils at 'breaking point' as cost-shifting crunch hits ratepayer funds
A new report commissioned by the organisation reveals councils across the state are absorbing a staggering $1.5 billion from both tiers of government each year.
A City of Newcastle spokesman said cost-shifting is one of the most significant challenges facing the local government sector.
"The issue is neither new nor the impacts unknown to the NSW government," he said.
"Cost-shifting has a major impact on City of Newcastle's ability to deliver everyday services to our community.
"It reduces our ability to fund essential infrastructure projects and forces us to increase rates and fees to cover services that are imposed by the NSW government."
The council spokesman said a November 2024 Parliamentary Inquiry report into the ability of councils to fund infrastructure and services recognised the impact of cost-shifting and called on the state government to identify opportunities to reduce it.
Lake Macquarie City Council estimates that cost-shifting costs it almost $40 million a year.
Cost-shifting happens when one level of government hands the responsibility for a service, asset or function to another level of government without providing funding to cover the costs.
Among Local Government NSW's (LGNSW) cost-shifting gripes are the state government's Waste Levy and Emergency Services Levy, as well as what they call a "huge shortfall" in library funding.
Lake Macquarie council spends $16.3 million on both levies, while City of Newcastle forked out $38 million on the waste levy in 2024/25 and a further $4.9 million as part of the Emergency Services Levy.
"City of Newcastle is the only council in NSW that is a net contributor to the NSW and Commonwealth governments, paying more in taxes and levies than it receives in state and federal grants," a Newcastle council spokesman said.
"The unrelenting growth of cost-shifting erodes the important work councils do to maintain financial sustainability, and risks the capacity of councils to deliver the essential infrastructure and services required by their communities."
NSW Minister for Local Government Ron Hoenig declined to comment.
The Cost-Shifting 2025: How State Costs Eat Council Rates report shows the $1.5 billion burden on councils is an increase of about $140 million, or 10 per cent, since the last report for the 2021/22 financial year.
A Lake Macquarie council spokesman said the main impact of cost-shifting is that it limits the council's options on where its money is spent.
"We would prefer to spend these funds where community consultation has shown our constituents have greater needs," he said.
"We believe any reform should ensure the approach is administratively efficient, and resources are not wasted in the cascading effect of multiple funding flows between various government entities.
"Additionally, we need longer-term certainty on funding to allow appropriate planning that ensures taxpayer and ratepayer funds are used in the best way possible."
On average, LGNSW president mayor Phyllis Miller said nearly $500 per ratepayer in NSW is being diverted away from essential local priorities like roads, libraries, sporting facilities and community programs.
"These are services our communities need, want and deserve, and they're being severely compromised by councils needing to pick up the bill on behalf of the state," she said.
"Councils are having to foot the bill for state and federal functions and services that they didn't design and aren't funded to deliver."
Ms Miller has called on the state government to commit to genuine reform, including regulatory changes, proper budget support, and fair funding.
The LGNSW report is based on a survey of councils in which 64 out of 128 responded.
LOCAL Government NSW claims councils are at "breaking point" as a result of "relentless" cost-shifting, rate capping and "inadequate" state and federal government funding.
A new report commissioned by the organisation reveals councils across the state are absorbing a staggering $1.5 billion from both tiers of government each year.
A City of Newcastle spokesman said cost-shifting is one of the most significant challenges facing the local government sector.
"The issue is neither new nor the impacts unknown to the NSW government," he said.
"Cost-shifting has a major impact on City of Newcastle's ability to deliver everyday services to our community.
"It reduces our ability to fund essential infrastructure projects and forces us to increase rates and fees to cover services that are imposed by the NSW government."
The council spokesman said a November 2024 Parliamentary Inquiry report into the ability of councils to fund infrastructure and services recognised the impact of cost-shifting and called on the state government to identify opportunities to reduce it.
Lake Macquarie City Council estimates that cost-shifting costs it almost $40 million a year.
Cost-shifting happens when one level of government hands the responsibility for a service, asset or function to another level of government without providing funding to cover the costs.
Among Local Government NSW's (LGNSW) cost-shifting gripes are the state government's Waste Levy and Emergency Services Levy, as well as what they call a "huge shortfall" in library funding.
Lake Macquarie council spends $16.3 million on both levies, while City of Newcastle forked out $38 million on the waste levy in 2024/25 and a further $4.9 million as part of the Emergency Services Levy.
"City of Newcastle is the only council in NSW that is a net contributor to the NSW and Commonwealth governments, paying more in taxes and levies than it receives in state and federal grants," a Newcastle council spokesman said.
"The unrelenting growth of cost-shifting erodes the important work councils do to maintain financial sustainability, and risks the capacity of councils to deliver the essential infrastructure and services required by their communities."
NSW Minister for Local Government Ron Hoenig declined to comment.
The Cost-Shifting 2025: How State Costs Eat Council Rates report shows the $1.5 billion burden on councils is an increase of about $140 million, or 10 per cent, since the last report for the 2021/22 financial year.
A Lake Macquarie council spokesman said the main impact of cost-shifting is that it limits the council's options on where its money is spent.
"We would prefer to spend these funds where community consultation has shown our constituents have greater needs," he said.
"We believe any reform should ensure the approach is administratively efficient, and resources are not wasted in the cascading effect of multiple funding flows between various government entities.
"Additionally, we need longer-term certainty on funding to allow appropriate planning that ensures taxpayer and ratepayer funds are used in the best way possible."
On average, LGNSW president mayor Phyllis Miller said nearly $500 per ratepayer in NSW is being diverted away from essential local priorities like roads, libraries, sporting facilities and community programs.
"These are services our communities need, want and deserve, and they're being severely compromised by councils needing to pick up the bill on behalf of the state," she said.
"Councils are having to foot the bill for state and federal functions and services that they didn't design and aren't funded to deliver."
Ms Miller has called on the state government to commit to genuine reform, including regulatory changes, proper budget support, and fair funding.
The LGNSW report is based on a survey of councils in which 64 out of 128 responded.
LOCAL Government NSW claims councils are at "breaking point" as a result of "relentless" cost-shifting, rate capping and "inadequate" state and federal government funding.
A new report commissioned by the organisation reveals councils across the state are absorbing a staggering $1.5 billion from both tiers of government each year.
A City of Newcastle spokesman said cost-shifting is one of the most significant challenges facing the local government sector.
"The issue is neither new nor the impacts unknown to the NSW government," he said.
"Cost-shifting has a major impact on City of Newcastle's ability to deliver everyday services to our community.
"It reduces our ability to fund essential infrastructure projects and forces us to increase rates and fees to cover services that are imposed by the NSW government."
The council spokesman said a November 2024 Parliamentary Inquiry report into the ability of councils to fund infrastructure and services recognised the impact of cost-shifting and called on the state government to identify opportunities to reduce it.
Lake Macquarie City Council estimates that cost-shifting costs it almost $40 million a year.
Cost-shifting happens when one level of government hands the responsibility for a service, asset or function to another level of government without providing funding to cover the costs.
Among Local Government NSW's (LGNSW) cost-shifting gripes are the state government's Waste Levy and Emergency Services Levy, as well as what they call a "huge shortfall" in library funding.
Lake Macquarie council spends $16.3 million on both levies, while City of Newcastle forked out $38 million on the waste levy in 2024/25 and a further $4.9 million as part of the Emergency Services Levy.
"City of Newcastle is the only council in NSW that is a net contributor to the NSW and Commonwealth governments, paying more in taxes and levies than it receives in state and federal grants," a Newcastle council spokesman said.
"The unrelenting growth of cost-shifting erodes the important work councils do to maintain financial sustainability, and risks the capacity of councils to deliver the essential infrastructure and services required by their communities."
NSW Minister for Local Government Ron Hoenig declined to comment.
The Cost-Shifting 2025: How State Costs Eat Council Rates report shows the $1.5 billion burden on councils is an increase of about $140 million, or 10 per cent, since the last report for the 2021/22 financial year.
A Lake Macquarie council spokesman said the main impact of cost-shifting is that it limits the council's options on where its money is spent.
"We would prefer to spend these funds where community consultation has shown our constituents have greater needs," he said.
"We believe any reform should ensure the approach is administratively efficient, and resources are not wasted in the cascading effect of multiple funding flows between various government entities.
"Additionally, we need longer-term certainty on funding to allow appropriate planning that ensures taxpayer and ratepayer funds are used in the best way possible."
On average, LGNSW president mayor Phyllis Miller said nearly $500 per ratepayer in NSW is being diverted away from essential local priorities like roads, libraries, sporting facilities and community programs.
"These are services our communities need, want and deserve, and they're being severely compromised by councils needing to pick up the bill on behalf of the state," she said.
"Councils are having to foot the bill for state and federal functions and services that they didn't design and aren't funded to deliver."
Ms Miller has called on the state government to commit to genuine reform, including regulatory changes, proper budget support, and fair funding.
The LGNSW report is based on a survey of councils in which 64 out of 128 responded.
LOCAL Government NSW claims councils are at "breaking point" as a result of "relentless" cost-shifting, rate capping and "inadequate" state and federal government funding.
A new report commissioned by the organisation reveals councils across the state are absorbing a staggering $1.5 billion from both tiers of government each year.
A City of Newcastle spokesman said cost-shifting is one of the most significant challenges facing the local government sector.
"The issue is neither new nor the impacts unknown to the NSW government," he said.
"Cost-shifting has a major impact on City of Newcastle's ability to deliver everyday services to our community.
"It reduces our ability to fund essential infrastructure projects and forces us to increase rates and fees to cover services that are imposed by the NSW government."
The council spokesman said a November 2024 Parliamentary Inquiry report into the ability of councils to fund infrastructure and services recognised the impact of cost-shifting and called on the state government to identify opportunities to reduce it.
Lake Macquarie City Council estimates that cost-shifting costs it almost $40 million a year.
Cost-shifting happens when one level of government hands the responsibility for a service, asset or function to another level of government without providing funding to cover the costs.
Among Local Government NSW's (LGNSW) cost-shifting gripes are the state government's Waste Levy and Emergency Services Levy, as well as what they call a "huge shortfall" in library funding.
Lake Macquarie council spends $16.3 million on both levies, while City of Newcastle forked out $38 million on the waste levy in 2024/25 and a further $4.9 million as part of the Emergency Services Levy.
"City of Newcastle is the only council in NSW that is a net contributor to the NSW and Commonwealth governments, paying more in taxes and levies than it receives in state and federal grants," a Newcastle council spokesman said.
"The unrelenting growth of cost-shifting erodes the important work councils do to maintain financial sustainability, and risks the capacity of councils to deliver the essential infrastructure and services required by their communities."
NSW Minister for Local Government Ron Hoenig declined to comment.
The Cost-Shifting 2025: How State Costs Eat Council Rates report shows the $1.5 billion burden on councils is an increase of about $140 million, or 10 per cent, since the last report for the 2021/22 financial year.
A Lake Macquarie council spokesman said the main impact of cost-shifting is that it limits the council's options on where its money is spent.
"We would prefer to spend these funds where community consultation has shown our constituents have greater needs," he said.
"We believe any reform should ensure the approach is administratively efficient, and resources are not wasted in the cascading effect of multiple funding flows between various government entities.
"Additionally, we need longer-term certainty on funding to allow appropriate planning that ensures taxpayer and ratepayer funds are used in the best way possible."
On average, LGNSW president mayor Phyllis Miller said nearly $500 per ratepayer in NSW is being diverted away from essential local priorities like roads, libraries, sporting facilities and community programs.
"These are services our communities need, want and deserve, and they're being severely compromised by councils needing to pick up the bill on behalf of the state," she said.
"Councils are having to foot the bill for state and federal functions and services that they didn't design and aren't funded to deliver."
Ms Miller has called on the state government to commit to genuine reform, including regulatory changes, proper budget support, and fair funding.
The LGNSW report is based on a survey of councils in which 64 out of 128 responded.
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