Emergency Services Levy: NSW mayors united in opposition to cost hike, stripped subsidies

NSW mayors have united in their opposition to an “unexpected and major” cost imposed by the state government, revealing the millions they’d now have to find in already devised budgets.

Mayors raised concerns about service delivery, such as garbage pick-up. Picture: Tim Pascoe

The mayors of NSW are united in their opposition to an emergency services levy hike, and scrapped subsidies, warning Chris Minns’ new state government ratepayers and services would suffer if they didn’t ease the burden on councils’ strained purse strings.

The decision to hike the Emergency Services Levy – which funds NSW’s emergency services, paid by insurance premiums, local councils and the state government – was rubber-stamped by the previous state government, as was the scrapping of subsidies to offset the levies.

However, councils have been tasked with ripping up 2023-24 budgets – many of which took months of work and are on public exhibition – after the Minns’ administration revealed the move, and confirmed it would enforce the cost rise and not resurrect the subsidies.

The increase for NSW’s 128 councils amounts to about $77 million, a 53 per cent rise from the $143 million in the current financial year.

Mayors across the state told this publication of their efforts to rejig their budgets, how they received no warning but just an invoice, and how they were united in their opposition against the move.

Greater Sydney

City of Sydney Lord Mayor Clover Moore revealed the state’s richest council would have to fork out about $6.6 million towards the ESL, including $2.2 million in new costs.

“It’s a blatant cost shift, an imposition on councils to help the state government,” she said.

“It’s an unexpected and major cost, which will significantly impact our capacity to deliver services and important infrastructure.”

Ms Moore said no council wanted to hamper the “critical contribution” of the emergency services but it was essential to ensure they were supported through an “equitable and sustainable funding model”.

In suburban Sydney, mayors were lamenting the increase and the disappearance of the subsidy.

City of Sydney Lord Mayor Clover Moore said it was an “unexpected” and “major” cost. Picture: Sam Ruttyn

In Sydney’s shire, Sutherland mayor Carmelo Pesce revealed the hike, coupled with the subsidy loss, would cost council an extra $2 million in next year’s budget, wiping out almost 20 per cent of the rate cap it received.

“This isn’t money we have sitting spare in the piggy bank – it’s essential for the delivery of services and infrastructure our community relies on,” Mr Pesce said.

“This latest increase is a massive slug to our finances.”

Mr Pesce said he was concerned for his regional and rural counterparts.

“I know that many councils will do it even tougher than us and will be forced to make some really tough decisions around axing jobs, services and infrastructure projects,” he said.

Carmelo Pesce, mayor of the Sutherland Shire. Picture: Britta Campion

Hills Shire mayor Peter Gangemi called the system “wholly broken” and revealed council would see a 48 per cent increase of $1.5 million.

“Councils are already struggling with rising inflation and an unjustified rate peg, this new cost will leave us with bigger infrastructure backlogs and fewer services to support our residents,” he said.

Dr Gangemi called for the subsidy to be reinstated or the levy decoupled from the rate peg to allow council to recover the costs.

Hills Shire mayor Peter Gangemi.

Hunters Hill mayor Zac Miles

Hunters Hill mayor Zac Miles echoed sentiment of “cost shifting to local government”.

“It just means we have less money in the pot to deliver critical infrastructure and capital works for our community,” he said.

“These are budgetary increases that the NSW Government should be wholly responsible for – it has a real effect on our bottom line and our capacity to deliver essential services.”

North Coast

The concerns aren’t contained to Sydney, however.

Lismore mayor Steve Krieg blasted the move and said they’d have to pay about $400,000 after the hike, hampering flood-recovery efforts.

“The simple fact is that if we’re forced to pay the state government $390,000 that’s money that can’t be spent on flood recovery,” he said.

“We’d have no choice but to remove something out of the budget, which could be road repairs, drainage improvements – recovery efforts will have to be forgone.”

He said the last-minute move threw council’s budget into limbo, with the budget on exhibition from today.

Lismore mayor Steve Krieg. Picture: Cath Piltz

“After months of work all of a sudden there’s an extra $390,000 to find, which we don’t have,” he said.

Mr Krieg said the pinch would be felt in ratepayers’ pockets or services.

“These costs will have to be passed on or services cut,” he said.

In Tweed, whose council has its own flood-recovery effort, the move has made a difficult situation “impossible”.

Both the Tweed and Lismore mayors cited concerns less money could be spent on their flood-recovery efforts. Picture: Darren Leigh Roberts

“We’re in a flood recovery and now we’re getting an extra cost,” mayor Christine Cherry said.

“Most of us haven’t been able to include it in our budgets – so the state government has made it incredibly hard.”

The mayor revealed it will add roughly $550,000 in costs for the Tweed Shire Council, and said services and ratepayers would suffer.

“We will have to cut services if we’re forced to pay, it’s a massive impact,” she said.

Tweed Shire Council mayor Christina Cherry. Picture: Matt Roberts

Ms Cherry said her council proposed to the state government a “revenue neutral” method.

“A fix would be allowing us to have a line item on our rate notices, a separate levy contribution,” she said.

“It wouldn’t impact our ability to deliver services and would be a fair way of distributing the cost.”

Coffs Harbour mayor Paul Amos.

In Coffs Harbour, mayor Paul Amos said council didn’t get a warning but received an invoice for the new costs in late April.

“It came out the blue, we weren’t expecting it,” he said.

“We followed a standard IPART increase process, which we think would generate about $850,000 for council, and now we think about $700,000 of that will disappear overnight.

“Every single dollar is valuable, it will create some real pain at the service delivery level.”

Regional NSW

In Dubbo, mayor Matthew Dickerson said he was surprised the new state government didn’t take stock of the situation when they entered power.

“If I bought a new business, the first thing I’d change is nothing,” Mr Dickerson explained.

“I’d want to take a moment and work out how everything worked, look at the lay of the land and have a conversation about what could change.

“That approach by the new state government would have been more appropriate.”

Council, the mayor revealed, would be trying to find an extra $670,000 in the budget after the changes.

Dubbo mayor Mathew Dickerson. Picture: Ryan Young

“When we consult the community during budget submissions, very rarely people come in and say they want less money spent on a particular area,” he said.

“It’s going to be hard to satisfy those very valid requests that come from our community.”

In Wagga, mayor Dallas Tout said relationships were strained between council and the state government.

“Something will have to give, whether that’s library and museums, or less road maintenance,” he said.

Wagga mayor Dallas Tout.

Mr Tout explained Wagga Council runs a balanced budget and had made accommodations for a 40 per cent rise, an extra $1.4 million, if worse came to worst.

“You’d think that would cover it, but it was a 60 per cent increase, an extra $1.6 million,” he said.

“That’s horrendous in itself, but then we had a one-two punch of the subsidies being taken away.

“We have until June to find $200,000 – it has not been a good start for relations between local and state governments.”

A state government spokesman, however, laid the issue squarely at the feet of the previous administration.

“The contributions made by local councils to emergency services are determined through legislative requirements – these legislative requirements have not changed,” he said.

Emergency Services Minister Jihad Dib. Picture: Tim Hunter

Local Government Minister Ron Hoenig. Picture: Monique Harmer

“This increase was approved by the former government and the government did not have the time to engage with the process without jeopardising the funding arrangements for emergency services.”

The spokesman explained an expenditure review committee was looking at the issue and the government was committed to ensuring the emergency services were delivered sustainably, so as to minimise impact on councils themselves.

“The NSW Government recognises that councils are facing increased cost pressures and is focused on ensuring the sustainability of the local government sector,” he said.

“We have committed to implementing a review of financial modelling for councils, with a lens on the increasing cost burdens on residents, and we remain committed to that promise.”

The spokesman also confirmed it would listen to and engage with councils on a potential services levy line item on rates bill.

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