Local Government NSW (LGNSW) has called for the collection of any new State Government charge to do with the Emergency Services Levy to sit with the Revenue NSW, not with Councils.

Last week the NSW Government announced that proposals for reform of the Emergency Services Levy would be referred for inquiry, prompting LGNSW to make its call to not add another burden to local Councils.

LGNSW president Mayor Darcy Byrne said that Councils are currently forced to remit the State levy instead of the responsible state agency, Revenue NSW, undertaking the collection.

He said that while Councils supported the NSW Government making the ESL fairer and more equitable by broadening its base, it would not make sense for 128 different councils to be required to collect what was clearly a State Government charge.

"LGNSW would strongly oppose any move aimed at forcing councils to wear increased administrative costs and take the political heat for what is obviously a state government responsibility," Mayor Byrne said.

"After years of cost shifting to local government, many councils are in a challenging financial position.

"Continually forcing them to collect a State Government levy would be confusing for ratepayers and further hamper the ability of councils to professionally manage their finances."

Mayor Byrne is particularly concerned for smaller LGAs.

"In particular, for many smaller, regional and rural councils facing an existential threat to their financial viability, requiring them to administer a state government levy would be both unreasonable and unfair," Mayor Byrne said.

Most of the ESL is funded from a levy on insurance, however 11.7 per cent of the ESL is funded by a levy on councils.

"The ESL is one of the largest cost shifts onto council, amounting to $236 million in 2025-2026," Mayor Byrne said.

"We look forward to the opportunity to address the inquiry, but it's critical that the ESL be removed from councils to ensure fairness, transparency, and efficiency.

"It would be far more efficiently collected by a single NSW Government agency - such as Revenue NSW - as is the case in other states."