News and resources

Issue 37 November 2014

MAV President's Update - occasional report from Cr Bill McArthur, President of the MAV

Issue 37, November 2014

November was another busy month for the MAV. The state election kept us active in securing commitments from political parties that positively responded to the 51 priorities outlined in our local government Call to Parties, as well as advocating for gaming legislative reforms through the collaborative Enough Pokies campaign to protect vulnerable communities.

I attended the ALGA’s National Local Roads and Transport Congress in Tamworth, where Ballarat was announced as the location for the 2015 event, and I was honoured to be elected as ALGA Vice President at ALGA’s most recent Board meeting. As a proud White Ribbon Ambassador, last week I participated in events to support the elimination of violence against women. I would like to commend all councils for your continued leadership role and work to prevent violence against women, and in raising the profile of this important matter within your communities.

New Victorian Government

While counting continues to determine the outcomes in a number of seats and upper house regions, Victorians have voted for a change of government and I congratulate the new Premier-elect, Daniel Andrews and his team. The Legislative Council is looking increasingly likely to have an unprecedented mix of micro parties holding the balance of power which is sure to promise an interesting four years ahead.

It was pleasing to last week receive a response to our Call to Parties from Victorian Labor, which is published on our state election campaign page. Their response provides a strong basis for ongoing discussion, negotiation and advocacy with the new government. A priority will be to secure a commitment from the Premier that the recently signed Victorian State-Local Government Agreement will be honoured.

There were a number of encouraging commitments in Labor’s response to our Call to Parties. These include reducing the number of performance measures councils are required to report on; a review of the LG Act to involve the MAV and councils; joint advocacy to secure Commonwealth funding commitments; reviewing the landfill levy to ensure it reaches its goal of rehabilitating landfills; capital funding for rural, regional and outer suburban roads; and significant new investment in cycling and bus networks, plus $50 million for kindergarten infrastructure.

Earlier this year, local government unanimously opposed Labor’s rate capping policy. With the election of the new government, we must now shift our focus towards achieving the most sustainable outcome for our sector and communities who rely on core councils services and infrastructure. I will seek a meeting with the Local Government Minister as soon as the Cabinet has been announced to discuss this policy position as a matter of urgency. Our assessment is that the rate capping policy was a key component of their election campaign and we must work within the broad framework proposed by the Government to advocate for councils to continue to retain discretion in setting their own revenue strategies.

Our Finance and Rate Capping Taskforce has endorsed the MAV’s proposal to commission work by a top tier consultancy on constructing an independent local government cost index to reinforce that CPI has no bearing on the changes to councils’ underlying costs. We will also be seeking to ensure any model adopted by the Government allows appropriate consideration of factors central to councils’ revenue requirements – such as population growth, changed roles and responsibilities, grant indexation and reducing the cost of the ESC submission process faced by councils.

MAV launches Australian first municipal bonds market

LGFV logo

On 7 November the MAV’s new Local Government Funding Vehicle (LGFV) issued Australia’s first municipal bonds to market on behalf of 30 participating councils. Banking partners NAB and the Commonwealth Bank have assisted the MAV to establish this landmark municipal bonds market, along with other partners including Ernst and Young, and Linklaters Allens.

Across two instalments, the bonds will raise $240 million for councils with access to five and seven year fixed rate, interest only loans. By directly accessing capital markets, the LGFV has saved councils significantly compared with traditional borrowing rates available to local government. The LGFV is also creating increased competition in the market, and has led to the banks reducing their margins. However, while pricing benefits versus bank borrowings will fluctuate over time, the LGFV will always provide councils with the most competitive outcome based on the ability to source funding at cheaper rates than the banks.

The LGFV intends to issue bonds to market at least annually with an ongoing interim facility to be provided by CBA to offer competitively priced short-term loans, which will be consolidated and issued to the market as bonds once a minimum volume of $100 million is achieved.

We’ve received significant interest from interstate councils about this initiative. Victorian councils interested in participating, or wanting to find out more can get in touch with Cameron Spence at the MAV.

National financial sustainability campaign on the way

The ALGA’s November Board meeting approved development of a national local government campaign aimed at restoring the Financial Assistance Grants following the indexation freeze in this year’s Federal Budget, as well as securing a commitment that provides long term direct Commonwealth funding certainty for local government through the Federation and Taxation Reviews.

This campaign is a welcome and necessary step, and will require unity among councils nationally to be a success. The MAV’s Finance and Rate Capping Taskforce met last week and was briefed by the ALGA on the proposed campaign. The Taskforce will guide the MAV’s role in the campaign.

Next week the MAV will be meeting with the ALGA and state Local Government Associations in Sydney to further progress development of the campaign strategy and plan. Further information will be provided to all councils ahead of the campaign’s launch in 2015, with key timings to include Federal Budget submissions, and the Green Paper and White Paper processes for the Reform of Federation Review.

WorkCare regional briefings

WorkCare - the MAV’s proposed self-insurance workers’ compensation scheme for Victorian councils - has jumped a number of key hurdles in recent months. We secured participation agreements from 60 councils, well in excess of the 50 councils needed to ensure the scheme can work. We also finalised the preferred service provider for workers’ compensation claims/injury management, workplace health and safety, return to work, training and education services following a tender and evaluation process.

If MAV WorkCare is established, an independent actuary and audit has confirmed minimum savings of $7 million in the first year for councils, which is 15 per cent below the current WorkCover premiums.

As councils have previously been advised, forums will take place on 8 December at the MAV offices from 10am–12 noon and in Morwell from 3-5pm; 9 December in Ballarat from 10am-12 noon and Bendigo from 2.30-4.30pm; and Horsham on 10 December from 11am–1pm. This is an important opportunity for councils to also provide input into the development of a claims and injury management program to meet participants’ needs.

2015 MAV strategic plan consultation

Our 2015 consultation sessions will take place in February and early March to gain councils’ input into common strategic priorities that members would like the MAV to focus on in our 2015-16 annual work plan. Eight sessions have been scheduled across the state so mark them in your diary now:

  • Rural North Central region, 2 February, 12.30pm – 2.30pm, City of Greater Bendigo, Reception Room, Council Offices
  • Rural South West region, 5 February, 12 noon – 3pm, Warrnambool City Council, Reception Room, 25 Liebig St
  • Gippsland region, 13 February, 2pm – 4pm, Bass Coast Shire Council, 76 McBride Avenue, Wonthaggi
  • Rural South Central region, 16 February, 10.30am – 12.30pm, Golden Plains Shire, The Hall, Bannockburn Cultural Centre
  • Metro Melbourne regions, 24 February, 6pm – 8pm, MAV offices, Meeting room 1201, 60 Collins St Melbourne
  • Metro Melbourne regions, 26 February, 2pm – 4pm, MAV offices, Meeting room 1201, 60 Collins St Melbourne
  • Rural North West region, 27 February, 1pm – 3pm, Horsham Rural City Council, Roberts Avenue
  • Rural North East region, 5 March, 10am – 12 noon, Wangaratta Rural City Council, Wangaratta Performing Arts Centre

To RSVP or for more details about our strategic plan consultation sessions contact Gavin Mahoney at the MAV.

Warm regards
Bill