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Grim picture for rural councils prompts call to action from Rob Gersch

Rob Gersch.

Rob Gersch.

By Colin MacGillivray
Rural Councils Victoria committee member and Hindmarsh Shire councillor Rob Gersch believes Wimmera residents must rally behind their local councils and help lobby the state government to change the way they are funded or risk losing vital services.
Cr Gersch’s call for action comes in the wake of a report released by the Victorian Auditor-General’s Office on the results of its 2017-18 local government audits.
The report paints a grim picture for small rural councils, especially those in Victoria’s north-west.
According to the audits, every council in the Wimmera is currently considered at medium to high risk of not generating enough surplus to fund operations.
The report projects that all Wimmera councils will be in the high risk category by the 2020-21 financial year.
Another area of concern for councils is capital replacement, with indications that capital expenditure — money spent on physical assets including buildings, infrastructure and equipment — is in danger of falling below a stable level.
Hindmarsh Shire is one of the worst affected councils.
The report projects the council to be at high risk in four of seven financial risk indicators, and medium risk in another two, by 2020-21.
Cr Gersch said with populations declining in many rural areas of the state’s north-west, there were not enough ratepayers to generate the money councils needed to operate.
He said the state Labor government’s pre-election promise to conduct a review of rates in the state was a start, but would not produce a long-term solution.
He said the government needed to change the way councils were funded to make them sustainable.
“With small councils, we don’t have the income coming from rates,” he said.
“Ratepayers don’t have the capacity to pay, so even if there was rate-capping, we’d still have a problem.
“There is an inquiry going to happen this year, not just on farm rates or differential rates, because they have to look at the whole structure of rates.
“Small councils rely on the grants commission to allocate funding every year, and various other grants.
“I think the government is going to have to look at installing some sort of safety net for councils so that they are guaranteed a minimum amount of money.
“Whether it is through the grants commission or a one-off for councils where they receive funding, I’m not sure, but something needs to change.”
Cr Gersch said the government was looking into the problem, with Victoria’s Local Government Association commissioning a report by consultancy firm KMPG to investigate the financial sustainability of regional and rural councils.
The report found a high reliance on grant revenue placed financial pressure on rural councils, while small population bases limited the capacity for councils to generate their own revenue. It also found communities in small shires had less capacity to pay rates compared to people in metropolitan areas.
Cr Gersch said amalgamating councils would do little to solve the problem.
“In the last amalgamations we went from 210 councils down to 79, and if you look at the north-west, some of our areas are quite huge,” he said.
“If you amalgamate, you still have the same amount of roads and the same amount of infrastructure.
“You might cut back on a bit of administration, but not much.
“I don’t know whether amalgamations, as they were last time, are the answer.
“Councils at the moment are looking into sharing resources and that might help a little bit, but it’s still not the answer.
“I still think there has to be some assistance there somewhere.”
Cr Gersch said a small amount of money from the government would go a long way to helping rural councils achieve sustainability.
“We’re not talking big funding here,” he said.
“If you have a look at the billions that are being spent in the metro areas, the difference between being viable and not viable for councils out here is not a lot of money.
“It’s a little bit annoying that we seem to be struggling all the time, but there is money about that the rural sector is not getting its share of.”
Cr Gersch called on Wimmera residents to stand behind their councils and demand change from the government.
“Through Rural Councils Victoria we’re doing extensive lobbying, and as I speak we are putting a paper together to go to all parties with the Federal Election coming up,” he said.
“We’ll be lobbying the Federal Government, and we have to keep knocking on the door, keep making noises, keep advocating and keep bringing our case before the government.
“I think the community has to stand up and start lobbying also.
“You can’t just leave it to council to do it, the general public has to do it also, because that’s when the politicians will take notice.
“I believe councils have been very supportive of their communities in that they have cut back as far as they can go.
“The last thing councillors want to do is put rates up.
“If councils don’t have the money, they’ll cut back and we won’t have the lollypop lady, we won’t have our roads up to speed, we won’t have the sports facilities.
“That’s what will happen and I don’t believe the government wants that.
“We have to let our voices be heard in the city.”

The entire January 16, 2019 edition of The Weekly Advertiser is available online. READ IT HERE!

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Posted on Jan 16 2019

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