NSW councils foot the bill for underfunded compensation

The rise of the emergency services levy from the newly elected Minns Labor Government could spell disaster for local council budgets.

The emergency services levy is set to rise under NSW Labor, councils across NSW have approved rate rises with will disappear with the rise of the ESU.

Councils’ peak body Local Government NSW (LGNSW) President Darriea Turley said, “the ESL is an absolutely blatant cost shift by the state government.”

The NSW governments plan to increase the levy is to cover cost for a worker compensation scheme which has been significantly underfunded, according to Ms Turley.

“To make things worse, the ESL has seen stratospheric increases year-on-year to make up for the government’s unfunded workers compensation liability for emergency services workers struck down by a range of cancers."she said.

“The ESL is an absolutely blatant cost shift by the state government,” LGNSW President Darriea Turley said.

“To make things worse, the ESL has seen stratospheric increases year-on-year to make up for the government’s unfunded workers compensation liability for emergency services workers struck down by a range of cancers.

The emergency service levy increase for the 128 councils sits at just under $77 million. Regional councils will be effected loosing nearly all of their rate rise for 2023/24.

“Hay Shire Council will immediately lose 88.6 per cent of its approved rate rise to the ESL, while Bourke Shire Council will lose 94%, Yass Valley Council will lose 96%, and Tenterfield will lose 119%."

“Now it appears councils are being asked to fund massive rises in emergency services budgets, including a 73% increase in the budget allocation to the State Emergency Services (SES)," Ms Turley said.

The concerns continue to grow for councils who have been hit hard by covid, weather related cost, disasters, bushfire recovery and pay increases.

“The effect will leave some councils with insufficient funds to cover cost increases in other areas. These costs will need to be met by cuts to staff and services,” she said.