The NSW government was stacking the deck against councils by demanding they meet own source revenue benchmarks and then slamming them as greedy when they proposed rate rises, Local Government NSW said on Monday.
LGNSW President Keith Rhoades said local government minister Paul Toole was mounting a ‘pretty transparent stitch-up’ after reports that his proposal to unilaterally sack councils had been rolled in Cabinet.
‘The Minister accuses local government of greed, but it is his government that set the financial benchmarks councils are required to meet to deemed Fit for the Future,’ Cr Rhoades said.
‘Councils were told they had to meet certain financial benchmarks – some of which were criticised at the time by a range of experts – and for some councils the only way to do so is to increase rates.
‘That’s not because they’re poor financial managers – it’s the result of decades in which funding responsibility for infrastructure and services has been shifted off state government books and onto the shoulders of local government.
‘For nearly 40 years, cost shifting and ratepegging have required councils to pick up bigger and bigger tabs for infrastructure and services while preventing their revenues from keeping pace.
‘It’s a systemic problem which won’t be solved by forced amalgamations.
‘Forcibly merging two or more struggling councils just creates one big council with bigger funding issues.’
Cr Rhoades said examples of cost shifting were rife at LGNSW’s recent finance summit, including one in which a council was told to pass State Government costs in newly rezoned residential area on to residents.
‘The Department of Education told Lane Cove Council it should impose a so-called betterment tax on new residents to pay for a new school, while State Transit demanded Council pay them $100,000 to run public bus services in the area,’ Cr Rhoades said.
‘Meanwhile, the federal government has frozen Financial Assistance Grant indexation in a move that will starve councils across Australia of $925 million they would otherwise use to provide services and build and maintain community infrastructure.’
‘That’s why the minister for local government has got incredible gall to claim councils are greedy.
‘[Councils are] proposing to raise revenue the only way open to them to meet the very requirements set by the minister and his government.’