NSW is the only state in which pensioner concessions on rates are not fully funded by the State Government.

In NSW the State Government covers just over half of the mandatory concession amount, which has been stuck at around $250 per annum since 1993.

Local government is forced to absorb the remaining cost to the tune of around $64 million each year, with some councils being asked to forgo up to $1 million in rates revenue.

Local government supports these concession for pensioners - in fact we have advocated that they should be increased - but first and foremost we believe that welfare measures and income support is a matter for State and Federal Governments.

To ask councils to bear this burden is yet another form of cost-shifting, and impacts on the level and range of services councils can deliver.

If the Baird Government really cares about 'stronger communities' and 'stronger councils', then they'll do the right thing and pick up the same share of the bill as every other Australian state.

LGNSW has lodged its submission on the local government rating system with IPART, which is currently looking at the systemic problems placing financial pressures on councils despite forced council amalgamations.

Given the limited revenue base of local government it is unfair that councils should be required to fund this form of welfare assistance.

Providing welfare and income support is the responsibility of other spheres of government which are able to spread the cost of such assistance more equitably and efficiently over a broader revenue base.

Costs of pensioner concessions are inequitably distributed among councils, with councils in many coastal areas, regional areas and some established suburbs experiencing a higher concentration of pensioners.

Those who qualify for rebates are also disproportionately represented in low income areas where there is a high demand for council services but limited revenue raising capacity.

The cost of mandatory pensioner rebates is a rapidly growing burden for many councils many councils will not be able to afford further increases in the funding they have to provide for pensioner rate rebates.

Keith Rhoades, President, Local Government NSW.