The Municipal Association of Victoria (MAV) has addressed the Parliamentary Inquiry into Rates Capping, arguing the cap would severely impact councils’ ability to fund service delivery, especially in small rural shires.
MAV President, Councillor Bill McArthur, said the State Government should take responsibility for the gap in revenue left by the rate cap.
“The State has imposed a rate cap on councils to restrict their ability to raise revenue and now it must also meet its shared funding obligations to local government. This is a fair and reasonable expectation.
“Over a number of years councils have been working hard to introduce smarter ways of doing business in a more cost effective way to reduce the financial burden on ratepayers. This includes internal restructures, shared services, and collaborative procurement. But resources can only be stretched so far.”
Cr McArthur said councils are being asked to at once spend less and increase service delivery.
“Councils receive just three cents of every tax dollar collected, with the rest going to other levels of government.
“Doing more with less is unrealistic when your whole existence relies on a cap-in-hand approach to ratepayers to bolster under-funded State services.
“Unfortunately there is no money tree councils can access when they are asked to reduce spending and take on growing service delivery costs not adequately funded by the State,” Cr McArthur said.
The President said a joint State-local funding solution needs to be reached.
“Shared State-local government funding must be restored for beloved services that the Government is jointly responsible for like public libraries, maternal and child health, and school crossing supervisors.
“The Government must commit to signing partnership agreements for each service that councils deliver on the State’s behalf to ensure no communities are disadvantaged by their rate cap.
“Fair funding for these services should be a priority committed in the upcoming State Budget,” Cr McArthur said.
