The Municipal Association of Victoria (MAV) has released a report into the impact of the carbon tax on Victorian local governments. Surveying 38 councils, ranging across rural, regional and urban areas, MAV has concluded that the carbon price design has a lesser impact on council costs (and on rates) than the previous proposal under the 2009 Carbon Pollution Reduction Scheme (CPRS).
The analysis undertaken by MAV assumes that councils are likely to see their costs influenced in four main areas: automotive fuels, stationary energy, municipal waste and construction. The overall rise in costs in these areas is projected to range from 0.3–1.9 percent of expenses, dependent on particular councils’ energy usage and/or carbon reduction initiatives. This translates to a median rise of 0.8 percent, which is in line with the Federal Treasury’s prediction of the impact on consumer prices nationally.
According to MAV President, Councillor Bill McArthur, the fact that many councils have been reducing their greenhouse gas emissions will also reduce the impact of the carbon tax. “For over a decade Victorian councils have been actively working to lower their greenhouse gas emissions, and two thirds have adopted a formal greenhouse gas mitigation strategy,” says Councillor McArthur.
“Actions have included changes to vehicle fleets, improved building and street lighting energy efficiency, landfill methane gas capture, green purchasing programs and use of GreenPower. This means that in many cases municipal expenses and any flow on impact to rates will be lower than our estimates, as councils find cost savings rather than pass on cost increases to ratepayers.”
The Australian Local Government Association (ALGA) has estimated that the expenditure directly attributable to the price on carbon will add $230 million (0.8 percent) to the approximately $28 billion per year spent by local governments on a national scale. It is projected that the main areas that councils will feel an impact are electricity, gas and petrol costs, the generation of municipal wastes and costs related to the construction of buildings.
Not surprisingly, MAV’s analysis has been met with some relief on behalf of Victorian councils, and indeed, by ratepayers. More than anything, the generally slight impact of the carbon tax on councils attests to the commitment of local governments over a number of years to reduce their carbon footprint.
