Baw Baw Shire Council has reported adverse effects from the three-year Federal Government freeze on the indexation of Financial Assistance Grants, introduced in the 2014/15 Federal Budget.
Mayor Debbie Brown said, as a result of the funding freeze, Council must now implement cuts to services.
“The loss of funds through the freeze to the indexation of Financial Assistance Grants has impacted not only on the quality of essential services and infrastructure that Baw Baw Shire Council provides, but we’re now having to make some tough decisions on what services to cut back to adjust to the reduced revenue levels.
“The freeze will have a cumulative effect on Council’s overall budget with an annual impact of around $250,000 per annum.
“To put this into perspective, that’s up to $750,000 in key Capital Works projects over the next three years, which may need to be delayed to later financial years.
“This would mean our community would need to wait longer to see important reconstruction and renewal of roads and drainage, major culverts, recreation, buildings and laneways programs.
“These are certainly not outcomes that this Council wants to see after working so hard over the past few years to keep rate increases low, reduce the asset renewal gap, and do more with less by thinking strategically about financial sustainability.
“The Financial Assistance Grants are an important and valued source of Commonwealth funding for Council, and we will be joining a national campaign, along with the Municipal Association of Victoria (MAV), calling on the Federal Government in Canberra to immediately resume indexation of Financial Assistance Grants.”
MAV President, Cr Bill McArthur, said Federal funding is vital for regional councils.
“The untied Financial Assistance Grants are a vital part of Local Government’s revenue base, allowing councils like Baw Baw Shire Council to provide and maintain community infrastructure such as local roads, swimming pools and libraries.
“Past reports into Local Government financial sustainability have supported councils’ indications that the previous level of Financial Assistance Grants funding didn’t keep pace with demand for services and infrastructure in their local communities, and this current freeze to the indexation has only made things worse and will result in a permanent reduction in the Financial Assistance Grants base of about 13 percent once the freeze ends.
“It’s important that the level of funding provided to councils, the sphere of government closest to the community, is adequate so that our councils have the necessary resources to ensure infrastructure and services are provided at a reasonable level in their community.”
