RCV warns about services squeeze for councils

A FEDERAL inquiry into local government sustainability has heard small rural councils are on the verge of being forced to stop providing essential services and to permanently close facilities.

In its submission to the House of Representatives Standing Committee on Regional Development, Infrastructure and Transport, Rural Councils Victoria (RCV) stated many small rural councils were on the financial brink.

RCV represents councils including the Borough of Queenscliffe, Colac Otway Shire, Golden Plains Shire, Moorabool Shire and Mt Alexander Shire.

“We are at a point where we have to make some hard decisions,” RCV chair Cr Mary-Ann Brown said.

“Councils only have two reliable sources of income, rates – which are capped – and grants, which have been declining in real terms for years.

“Small rural communities are resilient and self-reliant, but rural councils are being hit from many directions all at once.

“In recent years there have been successive natural disasters, a cost of living crisis, community expectations have changed and the system for financing councils and council services has not kept up.

“Put simply, councils need more resources, and we need federal and state governments to help us keep up with inflation.”

With finances stretched, councils are making the difficult decision to pull out of services they do not see as core to their role in the community, RCV’s submission stated.

RCV’s survey of member councils found about a third had outsourced services in a bid to save money, with about a quarter saying they have also looked at raising fees and charges.

Many councils have also already cut jobs and extended plant replacement schedules.

Cr Brown said the best and easiest solution was for the federal government to increase the amount of Financial Assistance Grants.

“With communities and families across the country facing their own cost of living pressures, the option to raise revenue directly from communities is not a feasible one. Many in rural communities do not have the capacity to pay more.

“Governments have all been guilty of ‘cost shifting’, forcing local government to take extra responsibilities without providing adequate funding, as well as cutting support for local government in real terms.”

She said rural councils were being squeezed on both the expenditure and revenue sides.

“The soaring costs of providing and maintaining infrastructure, such as roads and road maintenance, is being exacerbated by limits on rural councils’ revenue sources, including the rate cap in Victoria.

“Without intervention, this problem will only get worse. If councils are not able to raise more money, they will not be able to meet the infrastructure and service delivery needs of their communities.”

For more information on the standing committee’s inquiry, head to aph.gov.au/Parliamentary_Business/Committees/House/Regional_Development_Infrastructure_and_Transport