On behalf of our member councils, WSROC has completed a submission to the House of Representatives inquiry into Local Government Funding and Fiscal Sustainability, hammering home the extent of the financial crisis confronting local government in Sydney’s west.

 The federal government inquiry was set up to examine the financial relationship between local government and other levels of government in Australia, with a particular emphasis on funding mechanisms and fiscal sustainability.

 Councils in Greater Western Sydney serve some of Australia’s fastest-growing, most diverse communities.

 Despite this, they must contend with structural revenue constraints, escalating ‘cost shifting’ and increasing responsibilities to provide essential infrastructure, emergency management support, ensure climate resilience and digital security.

 WSROC’s submission to the inquiry makes the case that such fiscal imbalances have resulted in increasing pressures on council services, and risks maintenance delays, program cuts or service-level reduction.

In addition, councils must contend with urgent, unexpected costs such as disaster recovery, timely clean-up of asbestos or other hazardous waste, escalating Microsoft fees, and other financial shocks.

 WSROC’s submission points out that the long-term risks of such an imbalance include infrastructure deterioration and growing inequalities between councils.

 WSROC outlined five key points of recommendation it believes should be at the core of a review of Local Government Funding and Fiscal Sustainability, namely:

1. Restore Financial Assistance (FA) Grants

Financial Assistance Grants have fallen as a share of national revenue over decades. This means less real funding relative to needs.

2. Reform the NSW rate peg system

The current rate peg system for NSW councils has not kept pace with councils’ growth and rising costs.

3. End cost shifting

Cost shifting from the Commonwealth and NSW Government has cost NSW local councils $1.36 billion, increasing pressure on councils.

4. Shift from Short-Term Grants to Long-Term Funding Programs

Councils increasingly depend on grants from the state and federal governments, which are often competitive, short-term and tied to specific projects instead of local priorities.

5. Improve Disaster Recovery Funding Arrangements (DRFA)

Many Western Sydney councils are highly exposed to natural disasters — bushfire, flood, severe storms and extreme heat — which impose substantial recovery and resilience costs on local budgets.

To download a copy of WSROC’s submission to the inquiry, follow this link.