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Five Key Budget Asks from Local Government

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In the handing down of its budget on 3 May, the Municipal Association of Victoria (MAV) is calling on the Victorian Government to better recognise the significant economic challenges faced by councils, following the sizeable loss of revenue from the mandated closure of facilities during the pandemic, together with the current rate cap and escalating operation and maintenance costs.

Councils are a significant player in the Victorian economy and a driver of economic activity across many industry sectors including construction, public administration, community services and public infrastructure.

In Victoria alone, we employ nearly 50,000 people across some 300 different occupations. It is responsible for $11.93 billion dollars of revenue and $123 billion in community infrastructure and assets such as roads, bridges, town halls, recreation and leisure facilities, drains, libraries and parks

Yet, few people realise that, unlike their State or Federal counterparts, councils do not have the same revenue raising capacity. Nationally, local government rates account for about 3.6 per cent of tax collected in Australia.

MAV President, Councillor David Clark, said councils are already being forced to have difficult conversations about services they currently provide, despite the fact we know every council in the state is being asked to do more by their communities, not less.

“We’re calling on the State Government for an improved partnership with local government – we can achieve much better outcomes for the broader community when we collaborate,” Cr Clark said.

“We spelt out the key asks in a pre-budget submission last November. It highlighted the impacts of another extended period of living with significant public health directions for councils and communities.

“We want to ensure that Victorian councils are financially independent and able to provide the local services and facilities specific local needs. This is critical to moving forward and achieving positive outcomes for all our communities and businesses.”

Five key asks from the local government sector in this State Budget are:

MCH Service

The Victorian MCH service is one of the key pillars of our preventative health system, but the service is under pressure as shown by the recent coordinated and system-wide metropolitan Maternal and Child Health (MCH) COVID-19 surge response in line with the state-wide Code Brown.

Adequate, flexible and sustained funding is critical, and the service needs the State Government’s commitment to a 50:50 partnership with local government. Currently the State Government is only contributing $123.85 per hour of MCH service, whilst it costs local government $142.79 per hour of service, therefore equating to the need for the State Government to increase their contribution by 15%.

Climate change

As climate change impacts on coastal areas become increasingly evident, there is an urgent need for strategic investment of $16 million over three years for coastal climate adaptation works. We must move beyond the current fix-on-fail approach. In recognition of these challenges, the Victorian Government established the Victorian Resilient Coasts program. Funding is now needed for the program to deliver on its objective to support councils to plan and implement long-term coastal hazard resilience and adaptation.

Funding for energy efficiency upgrades of major road lighting is another outstanding opportunity. Upgrades to LED lighting can improve energy efficiency by 60-70 per cent. With some 80,000 of these lights cost-shared by the Department of Transport (DOT) and councils, the energy savings and emissions reductions achievable are significant. Councils are willing and committed to proceeding with these works as soon as DOT contributes its share of funding, which would be $60 million over four years to make major road lighting energy efficient.

While several councils continue to advance policies to address climate change through the planning system, not all councils have the capacity or capability to do so. For those councils still at an earlier stage in implementing environmentally sustainable development (ESD) policies, additional resourcing, support and training is needed. Our ask is $4 million over two years to help councils embed ESD in the planning system.

Emergency Management

Significant funding is required to provide sector training and development commensurate with council’s expanding role. We are concerned that at least another year will go by without appropriate funding of a critical segment of Victoria’s emergency management sector. This is likely to result in burn-out and workforce attrition, which will ultimately affect communities. Councils must be appropriately resourced and trained to support their communities to prepare for and recover from emergencies.

The Municipal Emergency Resourcing Program (MERP) is currently the main funding source for the 64 eligible rural, regional and interface councils. This program provides an annual share of $4.9 million, plus an additional $1m during the pandemic.

The MAV is calling for an additional $3.85m to fund at least one full-time staff member in each council and a consultative review of the program to better reflect emergency risk and local government’s role in supporting municipal emergency planning and building community resilience.

Local roads

Unsafe and outdated local roads are putting our communities at risk. In 2020, 126 people died on regional Victorian roads, compared with 85 fatalities in metropolitan areas.

Rural and regional councils have a smaller revenue base, but larger road networks to maintain. These communities are calling for more support from the Victorian Government to deliver proper funding to councils for safety upgrades on local roads.

In particular, the Victorian Government needs to expand the current Rural Roads Support package to include support to the next 10 high-need councils. A further $1 million each would greatly assist more councils to respond to asset management and renewal gap challenges before it’s too late.

Mental health support

MAV strongly encourages the Victorian Government to bring forward its Royal Commission into Victoria’s Mental Health System recommendation to establish Local Community Collectives in each municipality. Councils are recognised as a key stakeholder to address local level risk as well as improve social cohesion and social connectedness to mitigate isolation, exacerbated by the extended public health lockdowns.

Councils have also identified declining mental health, particularly in younger cohorts, and have harnessed partnerships in responding. Harnessing these attributes can deliver tangible benefits to the Victorian Government if flexibility for local situations is built into the rollout of its initiatives.

For further information, contact the MAV Strategic Communications team on (03) 9667 5590.