At a Glance
• Campbelltown’s Emergency Services Levy will rise to $2.89 million in 2023–24
• The rebate previously provided by the NSW Government has ceased
• The increase absorbs 29 percent of Council’s permitted rate rise
• NSW councils collectively face a $77 million increase this year alone
• Call for restoration of the subsidy and structural funding reform

The Emergency Services Levy and Cost Shifting

The Emergency Services Levy is a statutory cost imposed on councils and the insurance industry to fund emergency services in New South Wales. Administered under the Emergency Services Levy Act 2017, it represents another example of the ongoing cost-shifting pressures facing local government.

Under the Act, insurers contribute 73.7 percent of the specified annual costs of the Rural Fire Service, State Emergency Service and Fire & Rescue NSW. Councils are required to contribute 11.7 percent, while the State Government pays the remaining 14.6 percent.

While the percentages may appear modest in isolation, the absolute figures are significant — and rising.

The Impact of Workers’ Compensation Reform

In November 2018, the NSW Government passed legislation strengthening workers’ compensation protections for firefighters diagnosed with certain work-related cancers. The reform was necessary and widely supported across the sector.

However, the financial consequences were substantial.

Campbelltown’s contribution increased by $1,225,579 — from $1,666,555 to $2,892,134. Following advocacy from local government, the State Government provided a temporary rebate to ease the transition. That rebate was extended for several years, including through the COVID-19 stimulus package, with the final rebate of $630,847 applied in 2022–23.

Last week, Council was formally advised that the rebate will not continue.

For 2023–24, Campbelltown’s total levy obligation is $2,892,134, comprising:

• $481,441 for the NSW Rural Fire Service
• $814,156 for the NSW State Emergency Service
• $1,596,537 for Fire & Rescue NSW

This represents a 73.5 percent increase compared with the current year’s net contribution.

The increase in the Emergency Services Levy amount this year will absorb 29% of the Campbelltown Council’s permitted rate increase in 2023-24.

In practical terms, nearly one-third of the rate rise approved by IPART will be consumed by this single externally imposed cost.

A Broader Structural Problem

This levy increase must also be viewed in the context of other financial pressures. The accounting treatment of NSW Rural Fire Service assets, previously raised, has already created additional financial and reporting burdens.

Cost shifting remains one of the most significant structural issues confronting local government in NSW. It occurs when higher levels of government transfer responsibilities or costs to councils without corresponding revenue adjustments.

According to research by Local Government NSW, councils collectively:

• Spend more than $2.2 billion annually on environmental management
• Maintain over $177 billion in community assets
• Manage 90 percent of the State’s roads and bridges
• Are addressing $2.5 billion in road damage following the 2022 floods

For 2023–24 alone, the increase in the Emergency Services Levy across NSW’s 128 councils totals just under $77 million.

The impact varies dramatically. Some councils will lose the majority — or more than the entirety — of their approved rate increase to the levy adjustment. While Campbelltown’s 29 percent impact is less severe than some rural and regional councils, it remains substantial.

Supporting Emergency Workers — Fairly

It is important to state clearly that the local government sector supports improved workers’ compensation protections for firefighters and emergency service personnel. These individuals place themselves at risk in service of the community.

However, the question is not whether emergency services should be funded. The question is how they should be funded.

Emergency services benefit the entire State. They are state-controlled entities. Structural reforms to workers’ compensation were state legislative decisions. It is therefore reasonable that the State Government fully fund the resulting cost increases, rather than transferring the burden to councils.

At this late stage in the budget cycle — after IPART’s rate determination, amid inflationary pressures, labour cost increases and supply chain constraints — the removal of the subsidy creates significant strain.

Even in a comparatively strong financial position, Campbelltown will forgo close to one million dollars that could otherwise be directed toward local services and infrastructure.

A Call for Reform

For these reasons, I am joining fellow Mayors and the President of Local Government NSW, Cr Darriea Turley AM, in calling upon the NSW Treasurer, the Hon. Daniel Mookhey, to restore the Emergency Services subsidy for 2023–24 and to work collaboratively with the sector on structural reform.

The time has come for a fairer, more transparent and financially sustainable model for funding emergency services in NSW.

Local Government must be able to plan responsibly, invest prudently and deliver essential services without unpredictable cost transfers undermining financial stability.

Reflection

Emergency services are critical to the safety and wellbeing of our communities. Their funding must be secure and sustainable. But sustainability must apply equally to local government.

If councils are to continue delivering roads, parks, community facilities and essential services — while managing growth and resilience challenges — structural cost shifting must be addressed.

The question is not whether we value emergency services. We do. The question is whether we value a financially sustainable local government system.

Read the original Mayoral Minute here: 7. Emergency Services Levy Cost Shifting