The Municipal Association of Victoria (MAV) President and Board elections were held on March 6, and I am honoured to have been elected President for the next two years.
Along with the 12 Board Members, five new and seven returned, I am confident that we will work collaboratively and positively to best represent the sector.
We have a challenging year ahead in local government, with many councils now beginning to examine how the new Victorian Government’s 2016/17 rate cap will affect budgets and community services.
In a fiscally constrained environment nationally, people are turning to their local council to help them as their needs grow.
There is both a rising population and increasing demand for council services, plus the ongoing need to maintain council infrastructure and facilities.
At the same time, external funding that councils rely on is decreasing.
This presents significant financial challenges for Victorian councils, particularly in the context of rate capping constraints, the impacts of the Federal Government’s three-year freeze on Financial Assistance Grants indexation, and the potential reforms of Federation and Taxation.
Councils will have little choice but to review and plan for a range of innovative measures to help them remain financially sustainable in the face of these changes.
For our part, the MAV will focus on leading the sector to find pathways to improve sector-wide and whole-of-government collaboration, and to harness efficiency and productivity through better use of technology and data analysis.
Working smarter and doing more with less will be critical to avoid cutting staff and services based solely on available revenue.
The proposed capping of council rates to the Consumer Price Index threatens to result in job and service cuts across the sector, with the greatest impacts in rural and regional areas where other revenue sources are limited.
An unwelcome legacy of the Kennett rate cuts and capping in the 1990s was the decline in council spending on asset maintenance and renewal.
While this delivered a short-term solution to address budgetary pressures, the long-term consequences were devastating.
Despite working with councils to identify infrastructure maintenance shortfalls and councils committing significant capital investment over more recent budgets to close these gaps, local infrastructure is still declining faster than councils can afford to repair and renew it.
A 2014 Auditor General’s report identifies local government’s asset renewal gap will grow from $225 million in Victoria to a projected $2.6 billion by 2026.
The MAV’s response is being guided by a member taskforce to identify the consequences of rate capping on communities, and seek a practicable model that reflects hardships and circumstances facing individual council budgets.
Development of an independent Local Government Cost Index to more adequately reflect council costs is also on the agenda to inform and influence the Essential Services Commission inquiry into the rate capping framework.
Simultaneously, councils are grappling with the Financial Assistance Grants freeze that is adversely impacting local budgets by $134 million over four years, again with rural communities hardest hit.
We will be working as part of the national campaign to restore indexation, and ensure local government’s voice is heard in the debate on both the Federation and Taxation White Papers.
This year more than ever it will be an important time for the sector to unite as one, to ensure we can overcome any challenges put before us.
