Cost shifting survey

The LGSA cost shifting survey is an annual survey which seeks to establish the extent of cost shifting by the Australian and NSW Government on to NSW Local Government. The survey measures the amount of cost shifting for a representative sample of the 152 general purpose councils in NSW, calculates a cost shifting ratio for each council and for the sample and extrapolates, from the sample ratio, an estimate of the amount of cost shifting on to the whole of NSW Local Government.

Please access survey reports below.

•  LGSA, The Impact of Cost Shifting on Local Government in NSW - A Survey of Councils - 2007-08, (2009) (158KB)
•  LGSA, The Impact of Cost Shifting on Local Government in NSW - A Survey of Councils - 2005-06 and 2006-07, (2008) (192KB)

Summary

The survey results confirm that cost shifting continues to place a significant burden on councils' financial situation. Despite the recognition of cost shifting and its adverse impacts on Local Government, cost shifting remains at a high level. Indicative figures show that cost shifting on to NSW Local Government amounts to around 6 per cent of councils' total income before capital amounts; i.e. about $380 million in the financial year 2005/06, $412 million in 2006/07, and $431 million in 2007/08.

The amount of cost shifting in 2007/08 of $431 million almost equals the estimated annual infrastructure renewal gap of $500 million per annum as identified by the Independent Inquiry into Financial Sustainability of NSW Local Government.

Contributions to the NSW Fire Brigade and Rural Fire Services, lack of adequate funding for public libraries and the NSW Government's failure to reimburse for mandatory pensioner rebates for rates are major examples. Councils are also not given sufficient financial resources for their responsibilities to regulate companion animals, manage contaminated land, control noxious weed, manage flood controls, or administer environmental regulation.

Cost shifting describes a situation where the responsibility for, or merely the costs of, providing a certain service, concession, asset or regulatory function are "shifted" from a higher level of government on to a lower level of government without the provision of corresponding funding or the conferral of corresponding and adequate revenue raising capacity. As recommended by the Independent Inquiry into Financial Sustainability of NSW Local Government, the LGSA undertake an annual cost shifting survey of NSW councils to help quantify the actual amount of cost shifting by the Australian and NSW Governments on to NSW Local Government.

The LGSA thank all councils, and particularly the staff involved in the completion of the survey, for their outstanding efforts.

Information and contact

For further information and any questions please contact Sascha Moege on (02) 9242 4045 or sascha.moege@lgsa.org.au or Shaun McBride on (02) 9242 4072 or shaun.mcbride@lgsa.org.au.