14 April 2011

Letters Editor

The Age

letters@theage.com.au

Dear Editor,

Response to ‘Government Grab Reaches All Time High’ (13 April)

New Australian Bureau of Statistics figures have unsurprisingly shown that local government taxes are rising.

Despite this, council rates represent just 3.5 per cent of total tax revenue, or $3.50 of every $100 collected. The Commonwealth collects 80.1 per cent of total taxes, while state governments collect 16.4 per cent.

Councils generally raise rates each year to counter the growing funding gaps and cost shifting from other levels of government; increasing wage, construction and material costs; and to boost spending on maintenance and renewal of ageing infrastructure before it declines into disrepair.

Councils are responsible for $55 billion worth of community assets, including 85 per cent of the state’s entire road network. Councils are also increasingly called upon by other levels of government to deliver services without adequate funding or where funding declines over time.

Each year, for example, Victorian councils contribute more than $100 million to prop up the State-Commonwealth chronically under-funded home and community care program and related aged care services.

The Commonwealth has also washed its hands of $600 million capital funding needed in Victoria to deliver national kindergarten reforms. It expects the State, councils or community groups to magically fund the cost of complying with Commonwealth-driven changes.

Onerous regulatory obligations imposed on councils put further pressure on property taxes. In 2010, this included extensive new emergency management responsibilities and tough electric line clearance rules.

Councils will be forced to continue asking ratepayers to pick up the shortfall or face service cuts until other levels of government properly fund the real costs of responsibilities they impose on local government.

Yours sincerely

Cr BILL McARTHUR

MAV President