Local, Independant and Effective
June 19, 2018

New approach needed to fund rural and regional local government

Federal Independent Member for Indi, Cathy McGowan has called upon the Federal Government to take a new approach to funding local government to ensure the long-term sustainability of rural and regional councils.

In a speech to the Parliament today, Ms McGowan said the recent report from the Victorian Parliament’s Inquiry into the Sustainability and Operational Challenges of Victoria’s Rural and Regional Councils, shows the Commonwealth Financial Assistance Grants have been an essential revenue resource for councils outside metropolitan Melbourne.

The report indicates how the three-year freeze on the total grants pool between 2013-14 and 2016-17 put significant financial pressure on councils including those local governments in Indi.

“At regular meetings with Indi local government CEOs and mayors, I have heard the existing Financial Assistance Grants program and rating systems do not enable councils to meet service expectations,” Ms McGowan said.

“Councils’ responsibilities have also changed and this has put increased pressure on their revenues. An example is that local government is expected to make a contribution to the provision of new mobile phone towers in rural and regional areas.

“Wodonga Council has noted that while underspending on infrastructure will not appear immediately, it has a financial impact in the longer term.

“Mansfield Shire notes that the council could borrow more money but increasing its debt is a band aid solution that is not only unfair on ratepayers and community but ignores the main problem – that councils lack sufficient income to provide core services.”

Ms McGowan said the House of Representatives Select Committee into Regional Development and Decentralisation had heard from local governments around Australia about the pressures on council incomes arising from the freeze on the Financial Assistance Grants.

“The importance of these grants on the long-term sustainability of regional and rural councils is expected to be reflected in the committee’s final report that is due at the end of this month.”

Cathy’s speech can be found here at http://www.cathymcgowan.com.au/new_approach_needed_to_fund_rural_and_regional_local_government

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