CFP Business Specialist | Local Government Expert | Political Adviser
Having spent almost four years on Subiaco Council, I wanted to solve the puzzle of how cost-shifting works from federal and state governments to local government ratepayers.
I’ve come to the conclusion that cost-shifting mostly occurs by stealth.
Let’s take the issue of health for example.
At a meeting of local governments recently, a presentation was made by the Department of Health on why and how local governments should have “tailored Public Health and Wellbeing plans“. That’s a fine objective for the department to have, but who pays for the implementation of these “plans”? There was no mention by the presenter of the financial implications for ratepayers, or a cheque from either the federal or state government to assist with the health programme.
As I listened more to the presentation, I got the impression as with all the government’s presentations I’ve seen, that it is assumed and expected that any government program like health, forced amalgamations or development assessment panels, the costs will be shifted to local government ratepayers without question.
The federal government collects taxes in the form of the medicare levy on all taxpayers of 2% and a medicare surcharge starting at 1% if the family income is over $180,001 if they do not have private health cover.
None of these taxes end up with the local government yet the federal and state government expects all local governments have welfare functions, recreation officers and out of school care holiday programs (Ref. City of Perth submission, Local Government and Cost Shifting, 2003).
Local governments are also expected to collect the state government’s direct taxes for the Emergency Services Levy (ESL). The ESL has increase by nearly 100% in six years of the Barnett government, and then Mr Barnett claims that local government rates are too high!
So next time you hear the federal and state government withdrawing a service, note it and check with your local council for any plans to offer that service, then watch the cost-shifting by stealth to ratepayers.