The call follows the release of a new report showing councils are now carrying an additional $1.5 billion in costs imposed by other levels of government.
At this month’s ordinary meeting, council looked at Local Government NSW’s July 2025 report, produced by independent consultants Morrison Low, which examined cost shifting in the 2023/24 financial year.
The findings showed that costs had increased by around $140 million since the 2021/22 report, when cost shifting was valued at $1.36 billion.
Murray River Council Mayor John Harvie said the continuing cost shiftings were negatively impacting local governments.
“Our communities deserve better,” he said.
“The decades-long practice of cost shifting is continuing to undermine the financial sustainability of the local government sector. This must stop.”
The report further identified the top five cost shifts impacting NSW councils.
These include mandatory rate exemptions for profit-driven state-owned corporations, the state-imposed waste levy on ratepayers, and underfunded regulatory responsibilities such as development application assessments.
Councils are also required to contribute 11.7 per cent of the cost of NSW emergency services and cover the shortfall in library funding, with the state now providing only six per cent, leaving councils to fund an extra $181.8 million to meet community needs.
The November 2024 report of the parliamentary inquiry into the ability of councils to fund infrastructure and services also called on the NSW Government to identify opportunities to reduce cost shifting to local government.
Cr Harvie said the NSW Government needed to address the matter to alleviate the strain on local governments.
“Both federal and state parliamentary inquiries have recognised cost shifting as one of the most significant contributors to the financial concerns of local government,” Cr Harvie said.
“It is essential that the NSW Government urgently seeks to address cost shifting through a combination of regulatory reform and appropriate funding.”
Following its review of the report, council resolved to write to the NSW premier, the treasurer, and the minister for local government to seek urgent action on this issue.
The full LGNSW cost shifting report can be accessed at lgnsw.org.au/costshifting
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