We are working with local government to help the sector secure its financial future.
Our work involves advocating the sector’s economic and financial needs and arguing for greater recognition of local government's role in a range of government funding programs.
As well as participating in the state government's budget planning process, we also research new and evolving financial issues.
CEDA Federation Report
The Committee for Economic Development of Australia (CEDA) released a report on the reform of Australia’s Federation.
The report argues in favour of federalism, with the benefit of the current system estimated at $4507 per person.
The report discusses issues relevant to local government, including metropolitan governance and obtaining greater efficiencies for councils.
It is generally optimistic about the role that councils can play in delivering improved services to their communities, and remaining a vibrant and important tier of government.
It finds that reforms to the federation should strengthen the financial powers of the states, with the substantial degree of vertical fiscal imbalance – where the Commonwealth collects a majority of taxation revenue while the states have a majority of the spending responsibilities – limiting the benefits derived from our federal structure.
The solutions to this problem presented by CEDA is a range of reforms aimed at increasing states’ revenue raising powers, combined with mechanisms to better engage the public in the debate around federation reform.
Carbon tax repeal
In light of the repeal of the carbon price, we urge councils to consider how reduced costs from suppliers, such as electricity and gas costs, will be dealt with in future budget and rates processes to ensure transparency for ratepayers.
The Australian Local Government Association (ALGA) shared a briefing paper from Norton Rose Fulbright on the carbon tax repeal implications for local government.
The Australian Competition and Consumer Commission (ACCC) released its June 2014 quarterly carbon monitoring report, and has confirmed that councils who made statements about rate rises attributed to the introduction of the carbon price will be monitored to ensure they pass back cost savings to ratepayers. The ACCC report also states its expectations for how council liable entities should deal with any benefits, where funds collected to meet future waste emissions now exceed liabilities following repeal of the carbon price.
We are working with the ALGA and the Australian Government to resolve outstanding matters for councils with liable landfills.
Local Government Funding Vehicle
The MAV’s new Local Government Funding Vehicle (LGFV) is close to issuing its first public bonds to help councils access cheaper borrowing rates.
Last week Moody’s Investor Services announced an Aa2 rating for the LGFV and noted … 'the very strong credit quality of participating councils and the credit enhancement mechanisms included in the LGFV’s structure'.
The funding vehicle is an important long-term step for local government to pool council debt requirements and deliver significant cost savings. Thirty councils will participate in the inaugural LGFV bonds issuance to raise combined borrowings in excess of $200 million.