In each edition we feature the views of a Local Government Association president. The following is from Councillor Bill McArthur President of the Municipal Association of Victoria (MAV).
As with any change of government, the election of a Victorian Liberal-Nationals Coalition last November brought new challenges and opportunities.
For the first time, the State will provide $160 million in rural road funding. This is a significant acknowledgement of our shared responsibilities for maintaining the vast local road network that comprises the majority of the state’s road infrastructure.
A key sector priority is reestablishing a framework to guide a productive State-Local Government partnership and implement the 2006 Intergovernmental Agreement on Cost Shifting. The Coalition Government has agreed to renegotiate a Victorian State-Local Government Agreement (VSLGA). This is critical as it provides clear guidelines for whole of government consultation, communication and negotiation to ensure better engagement.
Autonomy of Local Government is a national objective and each State faces its own challenges including ratecapping, declining funding, increasing regulatory obligations, and new responsibilities without commensurate revenue streams.
Previous ratecapping in Victoria saw a reduction in councils’ infrastructure expenditure, which worsened infrastructure backlogs and penalised councils with low revenue bases.
Today, there is a $600 million capital funding shortfall to achieve national ‘universal access’ preschool reforms by 2013; an annual Local Government contribution of $100 million to sustain under funded home and community care programs; growing obligations in emergency management; and increasingly burdensome reporting regimes.
While there has been some progress to redress cost shifting, a trend remains for other levels of government to undermine the autonomy of council revenue raising.
The Productivity Commission recently proposed an injury insurance scheme, partially funded by a levy on councils costing several hundred million dollars nationally. As a sector we must resist such moves. State taxes already collected through council rates undermine our capacity to raise own source revenue.
In the absence of transparency about the collection of these hidden taxes, the MAV resolved to encourage councils to identify State levies separately on rates notices. This will ensure communities understand the portion of their rates bill that won’t go towards municipal based infrastructure and services.
Financial security is paramount as councils provide a growing diversity of services, undertake more complex decision making, respond to increasing community expectations and demands for more transparent and accountable government. There is much to be achieved.
The MAV is pursuing a review of the Local Government Act 1989 with the Coalition Government to recognise the increasingly diverse roles of modern councils. Embedding a new VSLGA, and primary legislation to better reflect the contemporary practices of councils and clarify responsibilities for each level of government, are the first steps towards financial utopia.
