Mayor column: with Cr John Harvie

Published on 17 July 2025

Local Government NSW is the association that represents all councils in NSW. The association President, Mayor Phyllis Miller OAM of Forbes Shire Council, has just released the results of the latest report into the effects of ‘Cost Shifting’ on NSW councils and ratepayers.

I have spoken about this topic before, but it is so important to the financial wellbeing of your council, that I bring you this latest report entitled ‘How State Costs Eat Council Rates’. Cost shifting occurs when state and federal governments force councils to assume responsibility for infrastructure, services and regulatory functions without providing sufficient supporting funding.

The financial sustainability of councils across New South Wales is now at a critical juncture. Both Federal and State Parliamentary Inquiries have recognised cost shifting as one of the most significant contributors to the financial concerns of local government.

‘Cost Shifting 2025: How State Costs Eat Council Rates’, by independent consultants Morrison Low, reveals that NSW councils are currently being asked to absorb cost shifting worth more than $1.5 billion each year. This is an increase of 10 per cent since the 2021/22 financial year, when the total cost shift was estimated at $1.36 billion.

The practice has imposed an estimated cumulative burden of more than $11.31 billion over the last decade. Importantly, as cost of living pressures for households only seem to be rising every month, cost shifting now amounts to an average annual cost of $497.40 paid by each NSW ratepayer. In large rural councils, like Murray River Council, the cost to each ratepayer is $571.10.

The average figure equates to nearly $500 per ratepayer that councils cannot invest in the services and infrastructure their communities need and deserve. New libraries, sporting facilities or youth development programs are forfeited, road repairs are delayed, and rates have to rise as funds are instead diverted towards the unrecoverable cost of services, programs and functions that are imposed on councils, overwhelmingly from the NSW Government.

The NSW Government needs to take urgent action to address cost shifting onto councils and their communities, through a combination of regulatory reform, budgetary provision and appropriate funding. A summary of the report is available on-line at: www.lgnsw.org.au

Local councils’ finances have been further eroded over the last twenty years as successive federal governments have cut annual financial assistance grants by 50%. That equates to around $10million a year for Murray River Council.

Contact Helen Dalton MP or write to Premier Minns if you want the raids on ratepayer funds to stop.