Local councils in the Central West are suffering from cost transfers

Local councils in the Central West are worried about the gradual shift of development costs onto them by the NSW and Federal governments.

The Orange City Council, Bathurst Regional Council and the Dubbo Regional Council are appealing to the NSW Government for a re-look into the issue.

They are appealing in the wake of a recent Local Government NSW (LGNSW) report, which said ratepayers were forced to pick up the tab for local infrastructure and services to the tune of $820 million in FY 2015/16 – 7.5 per cent of local government’s total income before capital amounts.

LGNSW president Linda Scott said cost shifting was a significant problem and their research showed it was increasing at an accelerated rate. 

“This trend is being driven largely by the state government policies, and it is eating into council revenue by up to 17 per cent each year,” Ms Scott said.

Cost shifting occurs when the responsibility for, or merely the cost of, providing a certain service, concession, asset or regulatory function is shifted from one sphere of government to another, without corresponding funding or revenue raising ability required to deliver that new responsibility.

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Data showed that Orange City Council, Bathurst Regional Council and Dubbo Regional Council shared the most burden of cost transfer in the Central West.

Orange City Council shared $3.3 million in costs – 3.65 per cent of its total income.

Orange Councillor Joanne McRae said the council has suffered from cost shifting. 

“It is not fair at all. We are expected to deliver more services but without being able to actually get the funding to do so,” Cr McRae said.

“The council is now required to deliver the services required as per the Companion Animals Act. It includes employment of rangers and management of stray animals. We are asked to meet these requirements that are state mandated.

We call for 100 per cent of the waste levies collected by the NSW government to be returned to local governments so that we can provide the waste services to our communities,” she said.

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Cr McRae said local projects suffer because of cost shifting.

“The challenge is to balance the budget, which means taking money from the other projects. It also means there is less base for innovative community focused projects because we are spending otherwise. 

Through the Local Government NSW, Orange continues to support their advocacy work to end cost shifting immediately,” Cr McRae said.

When asked why the cost was being transferred onto local councils Cr McRae said the problem is that the state government and to some extent the federal government are too distant and they want to focus on big projects.

“They are less interested in day-to-day activities that make a difference to local communities,” she said.

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Dubbo Mayor Ben Shields said he has been regularly conversing with local state and federal members on the issue.

“Cost shifting was something that Dubbo Regional Council has always had to deal with. The amounts of money can be significant and it has an impact on the council’s budget but our council is in a fortunate financial position and has taken great care to budget for it,” Mr Shields said.

“I am in regular conversation with our local state and federal members and would have no hesitation in addressing the issue with them if we feel there is excessive cost shifting going on.”

Dubbo Regional Council shared three $3 million in costs – 3.27 per cent of its total income.

Similarly, the Bathurst council shared $2.8 million in costs – 3.5 per cent of its total income.

Bathurst Council general manager, David Sherley, said the issue of cost shifting is something that affects all councils in metropolitan and regional areas.

“Cost shifting impacts the way councils operate and means that we need to reassess priorities and review delivery of services based on current resources,” Mr Sherley said.

“Local government industries will continue to lobby the state and federal governments,” he said.

This story Don’t dig into our money: Central West councils ask NSW government first appeared on Western Advocate.