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Inquiry told cap on rates will hurt those who can least afford it

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With rate capping only a few months away, the MAV has made it clear that communities will be negatively impacted.

Councils are trying to perform a juggling act of increased demand and costs for services while the State fails to meet its funding obligations.

Addressing the Parliamentary Inquiry into Rates Capping on 9 March, the MAV said it was time for the State Government to accept that its cap on rates would impact councils’ ability to fund service delivery and infrastructure renewal works, especially in small rural shires.

Cr Bill McArthur, MAV President said for too long councils had been asking ratepayers to prop up the budget gaps left by the State Government's failure to honour funding agreements for a range of local services.

"The State has imposed a rate cap on councils to restrict their ability to raise revenue and now it must also meet its shared funding obligations to local government. This is a fair and reasonable expectation.

"Over a number of years councils have been working hard to introduce smarter ways of doing business in a more cost effective way to reduce the financial burden on ratepayers. This includes internal restructures, shared services, and collaborative procurement. But resources can only be stretched so far.

"Councils receive just three cents of every tax dollar collected, with the rest going to other levels of government.

"Doing more with less is unrealistic when your whole existence relies on a cap-in-hand approach to ratepayers to bolster under-funded State services.

"Unfortunately there is no money tree councils can access when they are asked to reduce spending and take on growing service delivery costs not adequately funded by the State.

"Rate capping is not the only financial challenge councils have dealt with in the last few years. The Federal Government's freeze of indexation on Financial Assistance Grants will rip $134 million out of council budgets over three years.

"The State's decision to scrap the Country Roads and Bridges program also created a $160 million black hole in rural shire budgets - hitting those councils who can least afford it.

"We are keen to see the State support councils so that no ratepayer is left behind. Communities rely on council-funded services and as populations continue to grow, more people want to access these services.

"Shared State-local government funding must be restored for beloved services that the Government is jointly responsible for like public libraries, maternal and child health, and school crossing supervisors.

"Historically each of these services were set up under 50:50 shared funding agreements with the State, but cost shifting has left councils funding the majority of these growing services. Public libraries are a good example, with councils contributing 83 per cent of funding and the State now providing just 17 per cent.

"The Government must commit to signing partnership agreements for each service that councils deliver on the State’s behalf to ensure no communities are disadvantaged by their rate cap.

"Fair funding for these services should be a priority committed in the upcoming State Budget," he said.

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For further information contact Cr Bill McArthur on 0437 984 793 or MAV Communications on 9667 5547.