Survey Shows Amalgamation Threatened NSW Councils Unfairly Forced to Take on $521 Million in State and Commonwealth Expenses – 18th March 2014

Proposals to forcibly amalgamate NSW Councils for financial efficiency reasons ignore $521 million in “arduous extra expenses that have been  unfairly ‘cost shifted’ onto them mostly by the NSW State Government” say the Greens.

The latest survey by the peak Council group reveals that in 2012 these extra costs were “5.63% of Local Government’s total income before capital amounts or $521 million>”

Greens Councillor Murray Matson reaffirmed that Randwick City Council should not be amalgamated and commentated,

“Randwick’s own study using the same researchers as the Government appointed Review Panel shows that we are financially sustainable in our own right and don’t need to be amalgamated. But like all NSW Councils our financial picture is made worse than it should be by the unfair moving of State expenses onto us. It’s called cost shifting.”

Fellow Greens Councillor Lindsay Shurey called for the State Government to:

“…reverse this odious financial undermining of Local Government before continuing any further in assessment of the financial need to amalgamate Councils”.


Cost shifting is where the costs of a service, concession, asset or regulatory function are “shifted” from a higher sphere of government on to a lower government without the provision of corresponding funding or adequate revenue raising capacity. It is a practice that has been bitterly resented by NSW Councils for decades. The peak NSW Council group, Local Government NSW, conducts a yearly survey of Councils to determine the level of cost shifting.

Most cost shifting in NSW comes from the NSW State Government and to a much lesser degree, the Commonwealth (0.18% of total cost shifting or just over $712,000 for immigration and citizenship ceremonies).

The following list of cost-shifting areas came from APPENDIX A of the Local Government NSW survey which includes some qualifications that should be read.

  • Contribution to Fire and Rescue NSW.
  • Contribution to NSW Rural Fire Service.
  • Contribution to NSW State Emergency Service.
  • Pensioners rates rebates.
  • Voluntary conservation agreements
  • Public library operations.
  • Shortfall in cost recovery for regulation of on-site sewerage facilities.
  • Shortfall in cost recovery for administration of the Companion Animal Act (NSW) 1998.
  • Shortfall in cost recovery for administration of Contaminated Land Management Act (NSW) 1997.
  • Shortfall in cost recovery for functions under the Protection of the Environment Operations Act (NSW) 1997.
  • Shortfall in cost recovery for functions as control authority for noxious weed.
  • Immigration services and citizenship ceremonies.
  • Shortfall in cost recovery for administering food safety regulation.
  • Provision of educational services.
  • Crime prevention/policing.
  • Flood Mitigation program.
  • Transfer of responsibilities for roads under RMS road reclassification reviews.
  • Medical services.
  • Road safety.
  • Community and human services.
  • Waste levy.
  • Sewerage treatment system license fee.
  • Waste management site license fee.
  • Taking away of revenue from crown reserve land under council management
  • Shortfall in cost recovery for processing of development applications.

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