IN the blast furnace of NSW politics, the relationship between state and local governments has long been a recurring and cantankerous tale, where the state holds all the power.
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And because councils derive their powers from state parliaments, councils are subject to a burgeoning state government enthusiasm for passing on costs for services and infrastructure.
Local Government NSW (LGNSW) describes itself as an "independent organisation that exists to serve the interests of NSW general and special purpose councils." City of Newcastle (CN) is a member.
LGNSW's most recent cost shifting report Cost Shifting 2023: How State Costs Eat Council Rates, highlighted a total cost shift to councils from other tiers of government of $1.36 billion in 2021-22, which is the equivalent of more than $460 per ratepayer annually.
This sees an increase of almost 80 per cent since the 2015/16 financial year, when the total cost shift was estimated at $820 million.
The report highlights that the largest direct cost shift to NSW councils is from emergency service contributions and other emergency service obligations, totalling $165.4 million.
The cost of rate exemptions is higher still, representing a total of $273.1 million of potential rates that are exempted and redistributed to other ratepayers to pay. An additional $288.2 million in waste levies are passed onto the ratepayers through the waste collection fees in their rates bill.
There is also a further $156.7 million in costs for libraries being covered by councils to make up the difference between the committed funding for councils' libraries and the subsidies received.
LGNSW says the relentless shifting of costs by other levels of government wipes costs from their budgets and transfers those costs to councils. They say this cost shifting "is quite simply, unsustainable and cannot continue."
The NSW Parliament's Standing Committee on State Development is inquiring into, and reporting on, the ability of local government to fund infrastructure and services.
The Committee is scheduled to report ahead of NSW Local Government elections, which are scheduled for 14 September 2024.
But the Minns state government is not holding high hopes for major additional support from the federal budget on May 14.
And simultaneously NSW is also copping a $11.5 billion loss of revenue over the next four years because of a change to the way GST money will be allocated to the states.
I would not hold my breath that the anticipated Standing Committee report will result in any reversing of the unbridled enthusiasm that other tiers of government display for shifting service and infrastructure costs to local government.
Just one example of cost shifting that continues to play out in Newcastle is the bureaucratic vortex surrounding the carpark at Horseshoe beach.
The area is well known by those travelling Australia as a place where one can set up camp without restriction, and there is no enforcement of any restrictions prominently displayed on CN signage. City commuters are also aware of this anomaly.
Without the written permission of Transport for NSW (TfNSW), CN is not able to enforce parking rules in the area. Last summer's explosion of illegal camper numbers - not to be confused with rough sleepers - was again highlighted by this masthead on January 8, 2024.
TfNSW owns the area known as Horseshoe Beach. This includes not only the beach but also the carpark, the road, the seawalls, the parkland, and the storage area used by Nobbys surf club.
CN has stepped in to maintain the beach area itself and ensure that the park area is mown, despite this land being the responsibility of TfNSW.
A CN spokesperson says council have been attempting to secure the necessary permissions from TfNSW to undertake enforcement activities at Horseshoe Beach for more than six months.
After multiple requests, TfNSW agreed to a staff meeting at Camp Shortland about reimbursing CN for maintenance of the site. This finally occurred on April 18, 2024.
Hopefully, positive outcomes for the site in terms of parking enforcement and maintenance of this popular harbourfront area are not far away. But who would be surprised if TfNSW eventually decides to hand over much of this area to CN.
A cost shift with the stroke of a pen and no further need for TfNSW to reimburse CN for maintenance. Abracadabra.
