Local councils across the state are facing serious financial pressures and a flawed rating system that threaten the long-term sustainability of the local government sector.

That is the finding of a recent NSW parliamentary inquiry on the ability of local governments to fund infrastructure and services.

The Legislative Council’s Standing Committee on state development looked at the level of income councils require to meet the needs of their communities, whether past rate pegs have matched increases in costs, the current levels of service delivery and the impact of cost shifting. 

The inquiry found that fiscal discipline alone won’t solve the financial challenges of local councils.

In its report to Parliament, the Standing Committee recommended that “the NSW Government should seek to implement measures to provide local government greater flexibility to set rates in response to actual cost increases and community service demands and expectations, while ensuring that there are sensible safeguards to keep rates affordable”.

The committee reported that there was “clear evidence that the rate peg has not kept pace with the level of income councils require to adequately meet the needs of their communities”.

Key recommendations included: 

• reviewing rate structures and redesigning the rating system
• enhancing rate-setting flexibility
• addressing cost shifting and fee limits
• revising grants and disaster recovery funding
• updating development contribution frameworks

Like other councils, Northern Beaches Council is facing a widening gap between rates income and the escalating costs of maintaining services.

We have saved millions of dollars by reducing costs and improving productivity. We continue to focus on cost savings through workplace reform, service reviews, property rationalisation and energy saving initiatives.

While these initiatives help balance our budget, they are not enough to support our long-term financial stability, just as the parliamentary inquiry has found.

Aging assets, the heavy costs of natural disasters, and cost shifting from other levels of government, make the challenge even harder.

If we want to maintain and improve our community assets, like our parks, playgrounds, sportsfields and swimming pools, maintain our local roads and footpaths and offer the same level of service that we enjoy today, a special variation to rates must be considered. 

Council is hopeful that the NSW Government will take onboard the recommendations of the parliamentary inquiry and make meaningful reforms to ensure the long-term sustainability of the local government sector.

In the meantime, we are exploring options for financial stability and we invite you to be involved in this process.

Learn more and give us your feedback via Your Say - Funding our future