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Rural councils ‘struggling’: MAV

Cr Mary Lalios.

Cr Mary Lalios.

Victoria’s municipal peak organisation has told a parliamentary inquiry that a reduction in state and federal government funding, combined with a two percent rate cap, has left rural councils struggling to maintain services and assets.
The Municipal Association of Victoria presented its views at a public hearing of the ongoing inquiry into the State Government’s rate-capping policy.
MAV president Cr Mary Lalios said financial projections produced by Local Government Victoria indicated that capital spending in small rural shires would decline by 30 percent from 2016 to 2020.
“In the next two or three years we are going to see serious impacts on councils’ ability to meet their community-service and asset-renewal obligations, particularly in smaller councils,” she said.
“Rural councils each lost about $1-million a year for their local road maintenance when the State Government did not renew the Country Roads and Bridges Program in 2015.
“On top of this, the Federal Government’s three-year freeze of Financial Assistance Grants indexation cost Victorian councils about $200-million for local infrastructure and community services.
“While we welcome the Federal Government’s decision to restore indexation, the three-year freeze has left a significant ongoing funding gap.
“It is critical that these funding cuts are reversed.
“Under the two percent rate cap, we are starting to see small councils really struggling to deliver services and capital-works programs.”
Cr Lalios said the MAV had successfully lobbied the State Government to restore several vital funding partnerships, to try to ease the financial burden on councils.
“The MAV is working hard to help councils achieve financial sustainability,” she said.
“Last year we achieved a 15.8 percent funding increase for maternal and child health services, restoring the 50:50 partnership between local and state governments.
“We have also successfully restored the 50:50 partnership agreement for the school crossings supervisor program.
“Before this, councils had been contributing as much as 80 percent.
“We welcome the restoration of 50:50 funding, but we do acknowledge there is still much work to do in this area.
“It’s now up to the state and federal governments to restore the funding they have cut for local community infrastructure and services to ensure rural communities are not negatively impacted.”

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Posted on Sep 13 2017

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