Cathy McGowan (Indi, Independent) Share this | Hansard source

I move:

That this House:

(1) notes that:

(a) the Commonwealth's Financial Assistance Grants are a key source of revenue for local governments, especially for regional and rural councils;

(b) the impact of the indexation freeze in the 2014-15 budget meant that local councils missed out on $925 million in funding to provide better infrastructure and better services for our local communities—in Victoria this equated to $200 million in cuts to funding for local roads and community services;

(c) the impact of the indexation freeze was magnified in rural and regional areas where local governments have small ratepayer bases and ageing infrastructure and these councils cannot afford a repeat of the indexation freeze;

(d) cost shifting onto local governments places them under increasing pressure to deliver services and maintain assets previously provided by other tiers of government and for rural and regional councils the impact is magnified due to their limited ability to increase revenue;

(e) the two main sources of funding for councils are rates and grants and as grant income declines, councils have had to fill the revenue gap by increasing rates or reducing services;

(f) the ability of rural and regional councils to increase revenue via rates is limited due to a high proportion of 'non-rateable' land and a smaller population, and revenue raising via user charges for facilities, parking fees and development applications adopted by metropolitan councils is not an option for regional councils; and

(g) rural and regional councils often have higher costs per capita than metropolitan councils, with:

  (i) older, more disadvantaged or more vulnerable populations, who require more services from councils;

  (ii) larger asset bases relative to the population;

  (iii) an environmental stewardship role, including responsibility for weed and pest animal management and flood mitigation infrastructure;

  (iv) more dispersed populations, which increase the amount of travel needed to deliver services or which require duplicate facilities to be provided in multiple locations to meet local needs; and

  (v) reduced competition among service providers and suppliers, which can increase costs for councils when purchasing goods and services; and

(2) calls on the Government to:

(a) commit to the sustainability of rural and regional councils by guaranteeing the Financial Assistance Grants will not be subject to another indexation freeze;

(b) work with the states and territories and local governments to review the funding methodology of Financial Assistance Grants so that distribution of funds supports the sustainability of rural and regional councils; and

(c) support the development of regional strategic plans with the states and territories and local governments to guide investment and avoid cost shifting and duplication.

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