State government hits Kempsey with Emergency Services Levy increase
Published on 02 May 2023
Councils across NSW are reeling this week after learning the new NSW Government will not subsidise the increase in the Emergency Services Levy (ESL) this year.
The ESL is a cost imposed on councils and the insurance industry to fund the emergency services budget in NSW. The majority is paid as part of insurance premiums, with a further 11.7 per cent picked up by councils and 14.6% by the State Government itself.
The new NSW government is implementing a “budget saving”, by discontinuing the practice of funding annual increases in the levy for councils since 2019.
For Kempsey this change will mean a $369K impact in the coming financial year alone if the subsidy is not maintained. This will in turn increase our budget deficit which is an additional burden in our ongoing push for financial sustainability.
For ratepayers this will either result in an increase of rates or further service cuts, with the exact impact to be determined once we complete investigative work into a Special Rate Variation.
The peak body for Councils across the state, Local Government NSW (LGNSW), said the decision to apply sky-high increases in the Emergency Services Levy would be catastrophic for many councils, and could see some become insolvent.
“The ESL is an absolutely blatant cost shift by the State Government,” LGNSW President Cr Darriea Turley AM said.
“This decision will have a catastrophic impact on council budgets. The decision comes late in the council budgeting cycle. It will shred budgets already under massive pressure from the combined impact of the pandemic, extreme weather events, high inflation and wage increases.”
“Hardest hit will be the rural and regional councils with small rate bases and a relatively large RFS component. Many councils in regional areas and those on the urban fringe also carry a large RFS component and a large NSW Fire and Rescue component, raising costs further.”
“This shock increase comes at a time when council budgets are still struggling with disaster recovery – and when you factor in the inflation and soaring costs we are all facing across the full gamut of our operations, the immediate future looks particularly bleak.”
LGNSW is urgently calling on the Government to:
- restore the subsidy for 2023
- unshackle this payment from council rates
- develop a fairer, more transparent and financially sustainable method of funding the critically important emergency services that benefit us all.