NSW Council Cost Shifting Analysis
Here's a tabulated breakdown of the major cost-shifting line items impacting NSW local councils, drawn from the Local Government NSW (LGNSW) / Morrison Low "Cost Shifting 2025" survey.
| Cost-Shifting Category | 2021-22 Estimate (A$ m) | 2023-24 Estimate (A$ m) | Change | Notes |
|---|---|---|---|---|
| Forced rate exemptions | 273.1 | 294.6 | +7.9% | Councils must exempt certain state-owned/profit-driven entities from rates despite service use. |
| Waste levy | 292.9 | 266.9 | -8.9% | NSW Govt waste levy passes costs through to councils and ultimately to ratepayers. |
| Regulatory functions (incl development assessment) | 208.0 | 258.8 | +24.4% | Councils undertake regulatory tasks but fees do not cover full cost. |
| Emergency services contributions/obligations | 165.4 | 240.8 | +45.6% | Councils fund part of state emergency service costs (e.g., Emergency Services Levy). |
| Funding programs (state funding shortfalls) | 181.3 | 203.5 | +12.2% | Includes shortfall of state funding for libraries, etc. |
| Pensioner rebates | 72.4 | 68.9 | -4.8% | Shortfall in reimbursement of mandatory rebates. |
| Service gaps | 66.6 | 63.9 | -4.1% | Miscellaneous unfunded service obligations. |
| Other cost shifts | 104.3 | 101.7 | -2.5% | A catch-all for smaller shifts. |
| Total cost shifting | 1,364.0 | 1,499.1 | +9.9% | Aggregate figure for NSW councils. |
Key Takeaways
- The total cost shift in 2023-24 is approximately A$1.50 billion.
- The largest single line items by size and growth are Emergency Services contributions (up ~45.6%) and Regulatory functions (up ~24.4%) indicating accelerating burdens in those areas.
- The Waste Levy has somewhat decreased in aggregate, but context notes suggest for many councils the cost has still risen depending on local arrangements.
- Rate exemptions continue to be significant and represent a fundamental structural shift: councils absorbing costs for properties/entities not paying rates.
- The figures demonstrate that cost-shifting is not a marginal issue—it is material, increasing, and has implications for council budgets, service delivery and infrastructure investment.
State-to-Councils Funding Flows
Below is a summary of selected state-to-councils funding flows for New South Wales (NSW) local government (LG) sector, based on publicly referenced budget and media-release figures.
| Funding Source / Program | Financial Year | Amount (A$) | Purpose / Notes |
|---|---|---|---|
| Rate concessions for pensioners (via councils) | 2023-24 | $78.5 million | State govt continuing to fund council rate concessions. |
| Regional Emergency Road Repairs Fund (RERRF) | 2023-24 | $390 million | Directed to eligible regional & rural councils for urgent road/pothole repairs. |
| Grants to meet housing/infrastructure targets | 2024-25 | $200 million | For councils to deliver infrastructure, open spaces, help with housing targets. |
| Additional capacity funding for the Office of Local Government | 2024-25 | $37.4 million | To strengthen regulatory capability of state's LG oversight agency. |
Key Caveats & Observations
- These amounts are selected items, not the full list of all grants/transfers the state makes to councils.
- Some flows (e.g., general purpose grants, indexation, disaster recovery funding) are either not detailed in the sources or not disaggregated in a way easily captured here.
- The state→councils funding is substantial, but in the context of the earlier table on cost-shifting (≈ A$1.5 billion annually) the direction of net flow becomes important: many costs are being pushed onto councils, even as these targeted transfers are made.
- For a full board-level briefing you may wish to obtain the official NSW Budget "Local Government" line items broken down by category (operational grants, capital grants, categorical assistance) to create a more complete table.