Review of Local Government Election Costs

IPART is reviewing local government election costs and has recommended a significant increase in costs to Councils in their draft report. Lithgow City Council has lodged a submission to IPART’s review of Local Government Election Costs. The submission details Council’s concerns with the impact on election costs from IPART’s draft recommendations as well as providing comments on IPART’s proposals for regulatory reform and to improve competition in the future.

“IPART’s recommended costing methodology indicates a 72% increase ($76,000) in elections costs for 2020 compared with 2016. An increase in this magnitude is simply unaffordable for Lithgow City Council”, said Lithgow Council Mayor Councillor Ray Thompson. Councils have been subjected to increasing cost shifting from other levels of government. Based on a cost shifting survey, Local Government NSW has quantified cost shifting at $820 million per annum. Examples of cost shifting include:

•21% increase in the Emergency Services Levy (paid to the NSW Government) from 1 July 2019 without any consultation. •The NSW Government’s waste levy. •Shortfalls in public library funding and pensioner rate rebates. •The cost of managing regulatory burdens such as the operation of Independent Hearing Assessment Panels, enforcement of companion animal regulations, and the management of contaminated land, noxious weed and flood controls. •Transfer of costs and responsibilities for crown lands and crown roads.

Rate pegging has not kept up with the accelerated rate of cost shifting.

Councillor Thompson added, “at the same time as Councils being expected to bear more costs, the NSW Government has implemented its Fit for the Future reforms. Councils are expected to be fiscally responsible and to place a focus on managing / renewing their assets. To achieve these goals, Councils have been working hard to improve productivity, save costs and generate revenue to manage the impact of these reforms on services and programs. In Lithgow Council’s case, proposed services and programs were reduced for the 2019/20 year to deliver a “balanced operating result (before capital)” budget as required by the Office of Local Government.”

“With the increasing cost and budgetary pressures on Councils, IPART’s statement in the draft report that the impact on ratepayers will be relatively modest can be considered to be ignorant of the facts. It is certainly correct that the financial impact to ratepayers of an increase in election costs will be minimised by the rate peg. However, as is the case with other extraordinary cost increases and cost shifting, the impact on ratepayers is inevitably a reduction in the necessary services and programs which Councils are expected to provide”, said Councillor Thompson.

Lithgow City Council’s submission to IPART recommends that the increased cost to Councils of the 2020 elections be no more than the cumulative rate peg increase from 2016 which reflects Council’s revenue raising constraints. Lithgow City Council is supportive of IPART’s recommendation that the State Government implement regulatory reforms aimed at facilitating future competition for local government election services.