When it comes to local government, Wagga City Council recently said it was considering a staffing cutback to rein in its budget, which is facing some very real challenges.

The decision to go down this path was never an easy one but, in the hard economic environment, inevitable. 

While its ability to raise revenue is severely restricted by the rate pegging process, its costs continue to balloon – particularly as the state government pushes additional roles and responsibilities onto local government in a desperate attempt to get its own budget into balance.

When it comes to staffing, the maths is pretty simple.

This year, the Independent Pricing and Regulatory Tribunal (IPART) capped rate increases at 2.3 per cent.

While a few sought exemptions to increase rates by larger margins, the vast majority resolved to make do within those parameters.

But when you consider the increases already built in to many industrial awards, it’s not hard to see how organisations such as the city council find themselves behind the eight ball.

While pay increases change year on year, they have often exceeded the rate pegging.

They also don’t take into account employees who receive pay increases as their skills develop and they take on additional responsibilities.

All of this means that there are few councils in the state that could budget for a wages increase of just 2.3 per cent – and wages for most councils make up a significant part of the overall budget.

Perhaps it’s time the state government reviewed its rate pegging policy and it was more reflective of the challenge facing councils when it comes to meeting payroll commitments.

While no one wants to see fewer people on the council payroll, unless there is more wiggle room to generate the income necessary to meet wage changes, that has to be the outcome.

Reducing staff numbers isn’t the ideal path, but the Wagga City Council is showing a level of maturity in doing so, recognising that keeping the budget under control is one of its major responsibilities.