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Sydney Morning Herald: Independent funding probe risks becoming an attack on councils: Greens

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Amanda Cohn
NSW Greens MP
10 July 2023

Sydney’s councils hope an independent review of the funding model for local governments will come up with a simpler scheme that ensures they are more financially sustainable in the long term. However, the NSW Greens warn the probe risks becoming the latest in a “series of attacks” they say Labor has launched on local councils since winning government.

Sydney’s councils hope an independent review of the funding model for local governments will come up with a simpler scheme that ensures they are more financially sustainable in the long term.

However, the NSW Greens warn the probe risks becoming the latest in a “series of attacks” they say Labor has launched on local councils since winning government.

Local Government Minister Ron Hoenig last week promised the state government would commission an independent investigation of the financial model for the state’s 128 councils, following a push from the NSW Independent Pricing and Regulatory Tribunal in response to surging rates.

Councils have voiced their concerns about state government cost-shifting, and budgetary pressures exacerbated by years of floods, bushfires, high inflation, wage hikes and pandemic restrictions.

Western Sydney Regional Organisation of Councils (WSROC) president Barry Calvert said the review was well overdue. The group has been urging state and federal governments to work with councils to devise long-term funding solutions.“The extraordinary complexity of the existing financial model – and the arbitrary constraints on how local government can fund services and infrastructure delivery – hinder councils from meeting community expectations, especially in rapidly growing regions such as greater western Sydney,” Calvert said.

“The costs of delivering basic essential services far exceed the capacity of the current funding mechanisms – an ad hoc mixture of rates, grants, and developer contributions.”

Calvert said the review should also investigate options to improve federal and state government funding of local councils, and argued that “focusing on councils alone will not cut it”.

Hoenig has said the government recognises councils and ratepayers are facing increased cost pressures. Last month, he told parliament that cash-strapped councils must rein in spending.

“I point out to [mayors from various councils] that financial sustainability is not about rate increases; it is about getting their own finances in order,” Hoenig said at the time.

 

Greens MP Amanda Cohn said most councils’ financial struggles were not caused by mismanagement, and instead they had been “set up to fail by the state government”.

She hoped the review could show the challenges that councils – particularly those in regional and rural areas – faced in meeting expectations for services, and the “need to bolster local government”. But she said the probe also posed a risk of becoming the “next step in a series of attacks on local government that we’ve seen from the new government, with the challenges with [council] de-amalgamation, and cost-shifting of the emergency services levy”.

The government is currently developing the terms of reference for the review.

 

IPART acting chairwoman Deborah Cope said it could examine measures to improve the rating system, financial sustainability, funding, costs and expenditure and financial management.

“It would be useful for the review to examine all funding sources that are available to councils and whether changes are needed in the funding models to ensure that councils operate efficiently and are able to deliver the services their communities expect,” Cope said.
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Amanda Cohn
NSW Greens MP
10 July 2023
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