A three-year inquiry examining the pressures on regional Victorian councils has found significant structural changes are required for municipalities to remain viable in a rate-capping environment.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
A suite of recommended changes were proposed in a final report tabled by a cross bench committee in parliament this week.
Some of those include a new state and federal government approach to funding councils, and a reassessment of what services local governments should be responsible for.
The report sided with ratepayers on the issues of rate capping, suggesting it was a policy not likely to change anytime soon, and the committee also ruled out the idea of amalgamation, stating it would not be the best way for councils to deal with their current challenges.
The City of Greater Bendigo has previously supported a third tier of local government, whereby the state’s 10 regional city councils – including Bendigo, Ballarat and Shepparton – would handle key facilities and services for the broader region, while the smaller councils – such as Buloke, Loddon and Strathbogie – would handle local decision-making.
Those smaller councils would sit “within a larger regional area” under a plan submitted by Bendigo council to the local government act review in 2016.
The current crop of councillors have not discussed the idea of amalgamation, or a third tier of local government, according to mayor Margaret O’Rourke.
“Our focus continues to be on ensuring the regional development role of regional cities is supported and that we are enabled to assist smaller neighbours as required,” she said.
Cost shifting from federal and state to local governments was an issue Bendigo had been vocal on.
Changes to funding arrangements for libraries, school crossing supervisors and other cost the council an extra $1.8 million per year.
Related: Rate cap impacts democracy: Council
“Council delivers approximately 100 services. It is not likely that other levels of government would look to take any of these on, so they need to continue to provide appropriate funding and ensure the funding split is fair,” Cr O’Rourke said.
“In the past, council has been successful in partnering with other levels of government to deliver major projects that are also regional facilities, such as Ulumbarra, Gurri Wanyarra Wellbeing Centre, the new Bendigo Airport runway and the Bendigo Stadium. However, not all smaller scale projects and services can continue to be managed using funding from the rate base.”
Meanwhile, the report also recommended considering whether mandatory differential rate categories should be implemented across the state.
In Victoria, some councils – including Bendigo – set differential rates for farmers that better reflect their capacity to pay rather than value of their land, however other councils don’t.
The committee suggested farmers, and retirement villages, be considered for differential rate categories.
Residents in Bendigo retirement villages have been strong supporters of differential rates, arguing they were unfairly lumped with twice the taxes of most ratepayers relative to the number services they used in a submission to the City of Greater Bendigo’s draft 2017-18 budget.
“There is no argument about paying our fair share of rates but we object to paying it twice,” the submission, lodged by Bendigo Domain residents committee, read.
Elsewhere, the report recommends financial assistance grants are overhauled, so that a higher amount of funds are given to councils based on need rather than population.
In 2017-18 the City of Greater Bendigo received around $15 million in financial assistance grants – approximately 7 per cent of recurrent revenue, compared to 6.2 per cent on average for other Victorian councils.
Inquiry into the sustainability and operational challenges of Victoria’s rural and regional councils
