Finance & taxation
We work with local government to help the sector secure its financial future. We also work with our members to improve their financial autonomy.
Our work involves advocating for 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.
Our current key priorities include continued advocacy to ensure that the Victorian Government’s rates capping framework does not have unintended consequences on the ability of councils to deliver their services to the community; supporting the implementation of the centralisation of valuations with the Valuer General for rating purposes; and monitoring the adequacy of state and commonwealth funding for programs delivered by councils on behalf of other governments.
Our advocacy on rate capping influenced its final design, with legislation encompassing our request for flexibility for the Minister to set different caps, and that a cap can (not must) be set by the Minister.
Other MAV positions supported in the cap model included the ability to grant a partial variation to the rate cap, rather than only accept or reject a variation request outright; and the Essential Services Commission's (ESC) preferred cap included a combination of Cost Price Index (CPI) and the Wage Price Index to better reflect council cost movements. The Minister has chosen to stick with her election promise and set a CPI-only cap, except in the 2018-19 year where the forecast CPI is the same as the ESC’s preferred methodology.
We also responded to the ESC’s proposed efficiency measure project, which emphasised that the rates capping policy is an efficiency measure and does not require a further specific efficiency factor to be applied; that the proposed methodologies were ineffective and poorly constructed and did not allow for the quality differences or the unique characteristics of councils.
Financial Assistance Grants
We partnered with the Australian Local Government Association to secure restoration of indexation for Financial Assistance Grants from 2017. The Federal Budget papers confirmed indexation commenced in the 2017-18 Federal Budget and will increase the value of these grants by inflation and population growth. These grants provided every council with vital support to deliver their services to the community and reduce councils’ rate requirements.
We are supporting the implementation of the centralisation of the valuation functions and the move from biennial to annual valuations, which was announced in the 2017-19 Victorian Budget. We secured an agreement for councils to not be financially disadvantaged by the move to more frequent valuations, for the state to provide support for the transition of the valuation function to the Valuer General, and a commitment that the state will pay for the full cost of annual valuations.
Submissions and briefs
We develop and form a collective local government sector view on issues around finance and taxation. These include:
- ESC Productivity Study: Local Government - Oct 2017 (PDF - 231KB)
- Parliamentary Inquiry into Rural and Regional Councils - Sep 2016 (Word - 405KB)
- Environment and Planning Committee's Rate Capping Inquiry - Jul 2016 (PDF - 702KB)
- Environment and Planning Committee's Rates Capping Inquiry - Apr 2016 (PDF - 724KB)
View all our finance and taxation-related submissions on our submissions page.
From time to time we establish member committees, taskforces and working groups to inform our finance policy and advocacy. We established a Financial Assistance Grants and Rate Capping taskforce to inform our advocacy in 2015 and 2016, and a superannuation taskforce in 2013 - 2014.
Model budget guide for local government
The local government model budget for the 2018-19 financial year has been released and is tailored for local government financial professionals.
It assists councils to prepare annual budgets in accordance with Australian Accounting Standards. The 2018-19 Model Budget is the first to be published by Local Government Victoria, and also includes a better practice guide.
You can find presentations on finance in our past event presentations section.
- Budget submissions and analysis
- Cost shifting and government agreements
- Council funding (Vic Councils)
- Rate capping campaign
Engage with us
For more information about our finance and taxation policy work, contact:
Manager, Research & Strategy
(03) 9667 5584