Councils under pressure: how the Illawarra is managing the money crunch
Lord Mayor sounds warning on funding
Wollongong’s Lord Mayor says the city is avoiding the financial pain gripping neighbouring councils, but has warned the pressures squeezing local government budgets are far from over.
Cr Tania Brown said Wollongong was operating with a balanced budget and was not running at a deficit, a position that stands in sharp contrast to Kiama Council, which this week voted four-to-three to pursue $5.4 million in cuts that could axe up to 30 jobs, cut youth and community services, and reduce library and leisure centre hours.
“Wollongong is quite fortunate,” Cr Brown said. “We’ve got balanced budgets, not operating at a deficit.”
Asked about Kiama’s situation, she didn’t mince words: “I feel for them.”
The Lord Mayor knows the same forces are at work right across the region. Natural disasters, rising infrastructure costs, and a federal funding formula that hasn’t kept pace with reality are all putting the squeeze on councils up and down the NSW coast.
“We’ve had seven natural disasters in the last five or six years,” Cr Brown said. “When I get federal money to fix a culvert or a dam, I can only fix that culvert. I cannot fix upstream to stop that happening again.”
Cr Brown said she had this week written to federal minister Kristy McBain, who holds responsibility for both Emergency Management and Local Government, to push for a review of the methodology used to distribute the Financial Assistance Grant, the main source of untied federal funding flowing to councils.
Potential closures in Kiama
The current formula, she argued, simply doesn’t account for geographic reality or disaster exposure: “Should Sydney get the same as Kiama?” she said.
The scale of Kiama’s crisis has come into sharp focus this week. SENTRAL Youth Services — a free mental health support service running since 1993 that helps teenagers with domestic violence, mental health and extracurricular activities — faces closure under the proposed cuts. ABC Illawarra reported, former psychologist Travis Flinn warning the move could lead to more local suicides, and called on the state government to step in. The community is still coming to terms with a cluster of suicides in 2020.
The draft budget also flags the potential closure or sale of the Community Recycling Centre and the Visitor Information Centre, with waste services potentially put out to tender. The United Services Union noted that Kiama’s rates are well below those of neighbouring Shellharbour, despite property values in the area being substantially higher.
A 2025 NSW Office of Local Government audit had already flagged Kiama as financially vulnerable, pointing to ongoing operating losses and the cost of unwinding borrowings from 2024-25, as well as losses from its aged-care facility Bonaira Bluehaven, which was later sold. Kiama was one of 11 councils placed on the watchlist. Wollongong and Shellharbour were not.
Nearby, Wingecarribee Shire Council’s Mayor Jess Fitzpatrick this week hit back at rumours rates would rise by as much as 70 per cent, saying rate increases will be set in line with the Independent Pricing and Regulatory Tribunal rate peg of 3.3 per cent.
As local government budget cycles roll around again, Cr Brown said no council makes decisions without considering the consequences.
“There’s always a political backlash. But in an environment where all the costs are going up around you - how you manage your community’s expectations on the level of services they expect, and how you’re going to deliver that, it’s quite the balancing act.”
Wollongong is trying to find other ways through. Cr Brown said the council has been methodically reviewing its assets and selling off surplus land before going cap in hand to ratepayers. A recent example is the $29 million sale of a 38-hectare block at Sheaffes Road, Stream Hill in the West Dapto release area. It was land the council held for more than 30 years, with proceeds earmarked for social, recreational and cultural infrastructure for the growing corridor.
Fuel prices are also on the radar. Cr Brown said progress on electrifying the council’s fleet had been real, but gas-powered swimming pools remained a significant unresolved cost. And while working from home might seem like an easy way to cut fuel bills, she said the flow-on effects weren’t worth it.
“If people aren’t buying their sandwiches and their coffees … discretionary spend is already down. The flow-on to our community is significant.”
She has written to Minister McBain calling for a rethink of how federal grant funding is carved up between councils. She’s not expecting a quick answer.
“You’ve always got your hand out, and you can only increase your rates once you get permission. It is hard.”
The Draft Delivery Program 2025-2029 and Operational Plan is included in the business papers for discussion at Monday’s council meeting.
And more bite-sized news you may have missed …
Wollongong Private Hospital plans on display
A proposed major expansion of Wollongong Private Hospital will see the Crown Street facility transformed into a 19-storey healthcare precinct, anchored by a new medi-hotel and aged care accommodation spanning three purpose-built upper floors.
The development, subject to a State Significant Development Application, would more than double the hospital’s gross floor area - from 18,078 square metres to 39,059 square metres - integrating hotel-style patient accommodation with a full suite of expanded clinical services. The building would be about 45.6 metres.
Medi-hotel and aged care accommodation
Three upper floors of the expanded hospital - levels nine, 10 and 11 - will be dedicated to medi-hotel and aged care accommodation, classified under the Building Code as Class 9c aged care use. Notably, the internal fitout of these floors has been explicitly excluded from the current assessment, with the development application confirming the spaces will be “fitout by future operator.” The building shell is being constructed to aged care code requirements — including subdivision into smoke compartments and full sprinkler coverage — but the identity of the operator, the care model, and the number of residents remain publicly unconfirmed at this stage.
Beyond the medi-hotel, the expansion plans include a new emergency department, radiation oncology centre in a dedicated basement level, additional intensive care and operating theatre capacity, and expanded medical consulting suites across levels three to eight. A new ambulance bay, drop-off facilities on Crown Street and a second building entrance from Urunga Parade.
To make a submissions on the project, go through the NSW Planning Portal. If you need help making a submission, visit help and resources or call Service NSW on 1300 305 695.
Data-driven analysis from Business Illawarra
Business Illawarra director Coralie McCarthy packed out an hour full of data and insights from across the Illawarra, Southern Highlands, and South Coast on Wednesday.
The online session wasn’t short on candour. What emerged from the latest Business Illawarra briefing was a visitor economy that’s busier on paper, but under real strain in practice. Occupancy is climbing and people are still coming, but they’re spending less, staying shorter and booking later, tightening the screws on already stretched operators. Confidence across the region is fragile, with many businesses bracing rather than expanding. The message was clear: this is an industry still pulling weight for the Illawarra economy, but doing it the hard way—caught between rising costs, cautious consumers and a future that feels anything but settled.
More next week.
Interested in tiny homes?
Shellharbour City Council is proposing a two-year trial to waive development applications for mobile tiny homes used as rental accommodation, in a move aimed at easing pressure in the local housing market.
Under the proposal, eligible tiny homes could be installed and rented without the usual planning approval process, lowering upfront costs and cutting delays for property owners. The trial is framed as a way to test whether more flexible, small-scale housing can expand supply in a constrained market.
The policy targets mobile dwellings rather than permanent structures, allowing them to be relocated if needed and limiting long-term planning impacts. Council argues this creates a lower-risk pathway to quickly add rental options, particularly for single occupants or couples.
The proposal is now on public exhibition, with feedback set to shape whether the trial proceeds and how it is structured. Exhibition closes on May 8, 2026, with submissions accepted until May 22, 2026.
Parking changes in place
Wollongong Central will begin rolling out ticketless parking across its three CBD car parks from late April, replacing paper tickets with licence plate recognition technology.
The staged rollout starts with the P1 Keira car park on April 21 and 23, followed by P3 Gateway on April 28 and P2 Crown on May 5.
The system logs vehicles on entry via number plate scanning, with customers paying either at machines or by tapping a card on exit, based on length of stay. The shift is aimed at reducing congestion at boom gates and eliminating lost ticket issues, while cutting paper use. Parking rates will remain unchanged.
Data centres doubts
It comes as no surprise in the current climate that Australia isn’t the only country questioning the exponential spread of enormous data centres. This from our partnership with AP.
PORTLAND, Maine (AP) — The state of Maine could impose the United States’ first statewide moratorium on energy-hungry data centers in a sign of growing political opposition to tech giants’ massive structures that have stoked fears about blackouts, rising electricity bills and voracious water needs.
The legislation arose in a state that isn’t necessarily a destination for the computer-stocked warehouses that power artificial intelligence, but a couple of proposals there generated intense community backlash and helped propel a measure quickly through the state’s Democratic-controlled Legislature. Lawmakers on Tuesday approved sending the bill to Gov. Janet Mills, a Democrat who is running for U.S. Senate.
It’s the latest sign that increasingly stiff opposition at the local level is gaining a foothold higher up the political ladder. Tech giants and the data centers they are building have high-level support from President Donald Trump’s administration and many governors, who see them as economic engines and essential for winning the artificial intelligence race with China, even as voters raise concerns about the enormous amount of power data centers use. Analysts also warn of the possibility of blackouts in the mid-Atlantic grid in the coming years.
by Patrick Whittle and Marc Levy
The big ticket
In the bastardised words of Phil Collins, no ticket required for these two great events.
They’re family- and pet-friendly so why not venture to The Wentworth Markets at Port Kembla to support local creatives. From 9am-2pm.
And then, as it’s Record Store Day, head north - to Franks Wild Years at Thirroul for live music, a sausage sizzle and a whopper of a record sale.
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