'Extraordinary' pressure on councils adds up to an extra $460 per ratepayer

Bathurst Regional Council is joining with other councils across NSW to call for an end to the cost shifting affecting their ability to maintain services to an appropriate standard for their communities.

The issue was detailed in a mayoral minute to the February 7, 2024 meeting, which said that the pressure on councils "is now extraordinary".

"The unrelenting growth of cost shifting to councils, coupled with rate pegging, is increasingly eroding any possibility of financially sustainable local government and risking the capacity of councils to deliver tailored, grassroots services to their communities and properly deliver and maintain vital local infrastructure," the mayoral minute reads.

New research commissioned by Local Government NSW (LGNSW) shows that the increase in cost shifting has been accelerated by various NSW government policies.

When costs are shifted onto councils by the state government, it is the ratepayers who lose out.

The mayoral minute reports, on average, an additional cost of $460.67 for every ratepayer across the state.

This is based on a cost shifting report produced by Morrison Low on behalf of LGNSW for the 2021-22 financial year, which found $1.36 billion has been passed onto councils to fund.

This is an increase of $540 million since the last report from the 2017-18 financial year and represents lost services, lost opportunities and lost amenity for residents and businesses.

"With councils having to fund this ongoing subsidy for the state government each and every year it means our communities get less or go without," the mayoral minute said.

"They go without better roads, they go without better parks, they go without important community services that only councils provide, and they and their ratepayers are effectively paying hidden taxes to other levels of government."

Mayor Jess Jennings said the issue of cost-shifting has been going on for decades.

It occurs in a range of ways, including reduced grants, increased regulatory burdens, higher costs and levies, and inheriting roads and infrastructure which councils then need to maintain.

"I think it's fair to say, amongst our council, that the often-used phrase is that the financial model is effectively broken, and LGNSW wants to see this remediated in some way," Cr Jennings said.

He said all councils, not just Bathurst, are "being squeezed" by cost shifting.

As a result of the mayoral minute, the council has agreed to write to the Premier, the NSW Treasurer and the Local Government Minister.

The council will ask them to seek to address additional costs imposed on council through a combination of regulatory reform, budgetary provision and appropriate funding.

A copy of the Morrison Low report on cost shifting will be placed on the council's website so the community can access it.