Formal State and Local Government agreement the best way forward

The MAV’s continued call for a meaningful and constructive partnership – through a formal agreement between State and Local Government – has been strengthened by the findings of a State Parliamentary enquiry into Local Government funding and services.

The Legislative Council Economy and Infrastructure Committee report drew extensively from the MAV’s submission and evidence from councils across the state, as shown by a number of direct references, including:

“In proportion to their revenue, councils are required to manage a far higher proportion of infrastructure. The MAV told the Committee ‘for every dollar of revenue that Victorian councils collect, they manage $10 of physical assets, like parks, roads and kindergartens. For the Victorian government this figure is $4, and for the Commonwealth government it is 40 cents.”

The Committees’ key recommendations:

• Improving the partnership between local and state government through codesign in legislation and regulation and adherence to the principles of the Victorian State-Local Government Agreement
• Increases to untied funding and reducing the administrative burden of applying for and acquitting grants
• Victorian State Government update Commonwealth Government Disaster Recovery Funding Arrangements to allow betterment to build the resilience of local council infrastructure

Quotes from MAV President Cr Jennifer Anderson:

“It is clear the committee has taken seriously the weight of evidence presented before it by the MAV and councils in recognising the value of the role of local government and the challenges councils face in continuing to deliver high quality services and infrastructure to their communities.

The call to further investigate the impacts of cost shifting is critically important. Cost-shifting takes numerous forms and has a real-life impact on several council services; the committee calls this out in library services, Maternal and Child Health programs, early years education, and school crossing supervisors.

After years of MAV advocacy, a small trial of betterment funding has been introduced in Victoria but, as the committee calls for, councils need to have the ability to build infrastructure back better after a disaster, so we avoid repeat repairs after every weather event.

We’re also pleased to see the acknowledgement from the committee that the costs of infrastructure and service delivery have risen at a pace that outstrips the growth in grant funding. As a result many Victorian councils are being forced to make hard decisions about which essential community services to stop delivering.

We’re particularly pleased to see the committee’s recommendations address 9 of the 10 systemic recommendations raised in our MAV submission, as well as the majority of our service delivery recommendations.

The MAV will continue to advocate for the recommendations within the report and other key challenges like the Fire Services Property Levy, money collected each year through the landfill levy into waste minimisation and resource recovery, and exempting councils from the Windfall Gains Tax

We thank the Committee and will continue to advocate for councils to be a constructive and critical delivery partner to the State Government as we support inclusive, resilient communities and thriving neighbourhoods and towns across Victoria.”

Further key Committee recommendations:

• Reviewing the rate capping formula to balance the real costs faced by councils with the capacity of communities to pay
• Reinstate 50-50 funding split for libraries and school crossing supervisors
• Working with local government towards more fit-for-purpose financial reporting and an overall financial sustainability framework
• Addressing areas where costs have increasingly fallen on councils including maternal and child health, immunisation, and the rollout of kindergarten reforms