After serving 30 plus years as a Councillor on Maitland City Council, Ray Fairweather plans to retire in 2012.
Using his own Council as an example, he makes the following observations of how Local Governments are faring and what the future holds for the sector.
He is particularly concerned that Maitland Council seems to be treading water with very little improvement in the city infrastructure. Like many councils in New South Wales, most improvements are being funded by section 94 and 94A contributions from developers for additional infrastructure required with residential or industrial expansion.
But he says that this new infrastructure requires ongoing maintenance by Council, and any additional rate income generated will not cover these ongoing costs. As a result roads and other key infrastructure will deteriorate further from lack of funding appropriation by Council.
“Local Government in New South Wales is no longer financially sustainable with rate increases restricted by the NSW Government by both sides of government,” Councillor Fairweather said.
He points to the recent $410,000 increase in electricity charges for street lighting. Council’s 2010/2011 budget was restricted to a 2.6 per cent increase resulting in additional income from rates of $900,000, the wage increase for staff for the same year was $1.3 million, therefore requiring Council to find the extra $400,000 for wages, generally from cutting services and asset maintenance.
On top of this is substantial increase in costs for materials, machinery purchases and so forth.
He says increasing council rates to address such shortfalls makes it very difficult for ratepayers on fixed incomes such as pensioners, self retirees, and young families with large mortgages.
But ratepayers in the future are going to have to pay more in rates if councils are to be financially sustainable and provide existing services at the current level
He advocates that Local Government Australia wide should actively campaign strongly for Federal Government recognition and incorporate Local Government into the Australian Constitution. Once this has been achieved, it would enhance the argument for Federal funding of Local Government.
He believes that Local Government funding could come from the GST being increased from ten to eleven per cent, with this additional one per cent all going to Local Government.
“Failure to act with some urgency on Federal recognition and funding of councils will see most councils struggling to maintain their assets and services and some councils possibly going to the wall,” Councillor Fairweather said.
