3 June 2011

Dear Editor

Cost increases are an unwelcome reality in every aspect of our lives and councils are not immune. This year the Local Government Cost Index forecasts the costs for councils to deliver the same level of community services as last year will increase by an average 3.6 per cent.

This is due to council expenses being driven primarily by labour costs to deliver more than 100 community services, and labour and construction costs to maintain $55 billion of community infrastructure.

These key council costs are not reflected in the Consumer Price Index, which measures price movements for a ‘common basket’ of household goods and services.

As families struggle with cost of living pressures, councils are likely to experience increased demand for a range of community health, social and recreation programs, as well as aged care and children’s services.

It’s reasonable for council costs to grow in line with the Local Government Cost Index in order to maintain the status quo. The alternative is to reduce service levels or scale back maintenance and renewal of ageing infrastructure - which are untenable options for many communities.

Councils are acutely aware of the need to keep rates affordable without compromising service levels. However achieving the right balance remains difficult as the gap widens between funding from other levels of government and actual service delivery costs.

In areas such as home and community care, childcare, kindergartens and public libraries, councils have increasingly relied on ratepayer contributions due to chronic under-funding.

Some municipalities have actively asked communities to this year identify where they would be happy to accept trimmed services to help keep rates affordable.

Communities are encouraged to engage in their council’s annual budget process to help guide municipal priorities and inform the spending decisions for the coming year.

Sincerely

Cr BILL McARTHUR

MAV President​