An independent review of the financial model applying to local government in NSW would seem at first glance to be a welcome opportunity for councils such as Byron.
It might finally force the state government to face some of the structural inequities, such as cost shifting, that have impacted Byron Shire and other shires for decades.
But it seems the review, to be undertaken by the Independent Pricing and Regulatory Tribunal (IPART), may not be quite what Byron and other smaller councils were hoping for.
The terms of reference for the review have been released to local councils by the state government in draft form, and Byron Council staff are not well pleased.
In an at-times scathing assessment of the terms contained in the agenda to this week’s council meeting, staff argue that they do not in fact address the financial model of local government – i.e. how councils are financed.
‘There is no reference to, or accounting for the impact of cost shifting; the inequitable distribution of taxes, such as the methodology for calculating the Financial Assistance Grant program; or the burden of rates exemptions on other ratepayers,’ Council’s Director Corporate and Community Services Esmeralda Davis says.
Analysis ignored
Ms Davis further states that the proposed review appears to disregard IPART’s previous analysis of the method used to calculate council rates.
This evaluation recommended that the method be amended to be fairer to councils, and that they be allowed more freedom to implement alternative funding mechanisms.
‘The draft terms of reference are devoid of these matters, and rather shift the focus onto councillor and community visibility over the financial and operational performance of the councils,’ Ms Davis said in her written report.
Ms Davis implored the review to identify measures that could enhance the financial resilience of councils, and to include the issue of cost shifting.
‘Cost shifting to the extent of $1.36 billion… is imposed on NSW councils, yet for some reason is not included as a consideration for a review of the NSW council financial model,’ she said.
Byron councillors will debate and then vote on the staff recommendations regarding the draft terms of reference at this week’s meeting.
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