Local, Independant and Effective

90 sec statement - Non-indexation on Financial Assistance Grants will harm rural councils

Posted February 25, 2015


CATHY McGOWAN (Indi) (13:51): Budget cuts to local government have had a huge impact in Indi. Let me explain: with a budget of 16 million, a population of 6,000 and over 6,600 square kilometres, Towong is one of the smallest councils in Victoria.

Towong has a reputation for being innovative, efficient and punching well above its weight.

The Commonwealth's financial assistance grant of $3.6 million represents 22 per cent of the council's income. Over three years, the indexation freeze amounts to a loss of income of over $658,000. In Towong, a one per cent rate increase yields $47,000. This, along with new rate capping measures in Victoria, means that lost funding cannot be recouped through rate increases.

Towong works hard to be financially responsible and, over the past five years, has generated internal savings over $400,000. There is simply no fat left to cut.

Council is now looking to reduce services such as immunisation, maternal and child health, mobile library, road maintenance, transfer station operating hours and even public toilet cleaning on weekends. In Towong's case it is

the community that will suffer due to the indexation freeze—communities that cannot go without services and infrastructure that larger regional and metropolitan areas take for granted.

I call on the government to reverse the decision to freeze indexation in the next budget and stop hurting our small rural councils.

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