Media Release
Hay Shire Council is calling for urgent reform to address the growing financial burden of cost shifting, which is undermining councils' ability to deliver vital local infrastructure and services.
At its July meeting, Council resolved to support the latest report released by Local Government NSW (LGNSW) on cost shifting and will write to the NSW Treasurer to highlight the significant impact this practice is having on rural councils and their communities. Councillors also committed to informing the Hay community about the real cost of this issue, which is increasingly being borne by local ratepayers.
Cost shifting occurs when State and Federal Governments transfer responsibilities to councils without providing adequate funding. The 2023–24 report by independent consultants Morrison Low reveals that cost shifting has now reached a staggering $1.5 billion across NSW—an increase of $140 million (10%) since 2021–22.
For Hay Shire, this equates to a cost of
$497.40 per ratepayer—totalling
$898,304 annually across our 1,806 ratepayers. These funds, which should be going towards local projects and services, are instead being redirected to fill funding gaps left by other levels of government.
“This burden is having a direct impact on what we can deliver for our community,” said Mayor Carol Oataway. “Cost shifting means we’re forced to defer long-awaited projects like our main street upgrade, investment in economic development such as the industrial park, and reduce funding for road and infrastructure renewal. It’s unsustainable and unfair to our residents.”
The decades-long practice of cost shifting was also called out in the 2024 NSW parliamentary inquiry into council funding, which urged the State Government to take immediate steps to reduce it.
Federal Minister for Local Government, Kristy McBain, recently acknowledged the growing expectations on councils, noting that local government now goes well beyond “roads, rates and rubbish,” delivering everything from aged care services, youth services, health services and climate resilience.
Hay Shire Council is adding its voice to the call for a fairer funding model—one that reflects the increasing responsibilities being placed on councils and restores the capacity of local government to deliver for its communities.
The full LGNSW Cost Shifting Report can be found at:
www.lgnsw.org.au/costshifting