Sutherland Shire joins other councils fighting huge increase in Emergency Services Levy

The increase will wipe out the government-pegged 3.7 per cent rates rise for 2023-24.

Councillors unanimously supported a mayoral minute by Cr Carmelo Pesce that the council write to the independent pricing authority "advising of the financial sustainability impacts".

Cr Pesce said, "I am calling on councillors to support representations to the NSW Government in response to the highly damaging increase in the Emergency Services Levy (ESL) imposed on all councils without warning for the 2023/24 financial year.

"The ESL is a cost imposed on councils and insurance policy holders to fund the emergency services budget in NSW.

"The majority is paid as part of insurance premiums, with a further 11.7 per cent funded by councils and 14.6 per cent by the NSW Government.

"The ESL represents cost shifting at its worse, as it is imposed on councils without any mechanism for councils to recover costs."

Cr Pesce said the levy increase for the State's 128 councils in 2023/24 amounted to almost $77 million, with the total cost imposed on the local government sector increasing from $143 million in the current financial year to $219 million next year.

"This represents a 53.1 per cent increase, completely dwarfing the IPART baseline rate peg of 3.7 per cent for 2023/24, and council's rate increase of 3.7 per cent," he said.

"Reporting suggests that the increase in costs this year reflects a 73 per cent increase in the State Emergency Service budget and an 18.5 per cent funding increase to Fire and Rescue NSW.

"The impact of these large increases on councils' finances will be particularly severe in 2023/24 as a result of the NSW Government deciding to scrap the subsidy for council ESL payments."

Cr Pesce said, for Sutherland Shire Council, the ESL had increased by $1,034,023 for 2023/24, bringing the council's total annual contribution to $6,302,350.

"This increase amounts to 19.16% of the expected increase in rate income for 2023/24," he said.

"The previous Liberal government subsidised the ESL levy and the new elected Labor government has made a decision to discontinue the subsidy, which has been providing councils relief from the annual increase in the ESL since 2019/20."

Cr Pesce said, "If the NSW Government's decision is not reversed, it will have a detrimental impact on council's future ability to provide improved or enhanced services, and infrastructure maintenance and renewals.

The timing of this development is particularly challenging for councils as it comes so late in the local government budgeting cycle, well after IPART's rate determination for the coming financial year.

"All councils strongly support a well-funded emergency services sector and the critical contribution of emergency services workers and volunteers (many of whom are councillors and council staff).

"However, it is essential that these services be supported through an equitable, transparent, and sustainable funding model."

Cr Pesce said Local Government NSW had raised the serious concerns of the sector with the government and was seeking the support of councils.