The Municipal Association of Victoria (MAV) has made a submission to the State Parliament Inquiry into Local Government funding and services, calling for reforms that offer councils more flexibility to manage revenue needs and community impacts.
Speaking at the inquiry, MAV’s Director Strategic foresight and partnerships, Kat Panjari, said that the opportunities and challenges of the future cannot be addressed by one level of government alone.
“Victoria’s 79 councils are delivering the essential services and infrastructure to meet local and state priorities across numerous areas including community resilience, social cohesion and safety, climate change, and housing,” Ms Panjari said.
“Both federal and state governments lean on local government to deliver many of their priorities, often with low or even no funding to do so. This underscores the importance of adequate funding to maintain public trust and quality of life in Victorian suburbs, towns and rural areas.
“For every dollar of revenue they collect, Victorian councils manage $10 of physical assets like parks, and roads and kindergartens. For the Victorian Government this figure is $4, and for the Federal Government, $0.40.
“Accordingly, local governments have large, fixed costs to maintain these assets, imposing a major constraint on their budgets.”
In its submission to the inquiry, the MAV called for appropriate resourcing for functions completed by councils on behalf of other levels of government, the need to consider the impacts of cost shifting and address it by providing adequate revenue streams through a combination of grant funding, cost recovery, and value capture mechanisms.
Additionally, while the rate cap is not the sole challenge for councils, Mav’s submission said that reform is required to ensure it is fit for purpose.
“Reforms such as incorporating adjustments where cost increases have varied from forecasts or by implementing a multi-year approach to compliance, allowing councils more flexibility to manage revenue needs and community impacts from year-to-year.
“Financial pressures are forcing Victorian councils to make hard decisions about which essential community services to stop delivering.”
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