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Flexibility the key to economic recovery

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No two councils in Victoria are the same. They all have their own unique budgets and face individual challenges after two years of COVID-19 pandemic, making flexible funding the key to economic recovery.

With the next Federal Election just weeks away, the Municipal Association of Victoria (MAV) is calling for an increase in the untied Financial Assistance Grants.

MAV President Cr David Clark said that restoring Financial Assistance Grants to at least one percent of Commonwealth taxation revenue would ensure every community can participate in, and benefit from, Australia’s economic recovery.

“Local Government Financial Assistance Grants are a vital component of the financial sustainability of many Victorian councils, especially smaller and rural councils,” Cr Clark said

"The major benefit of these grants are that they’re untied. The provide councils with economic flexibility and money can be spent on specific community needs, including operations and maintenance” Cr Clark explained.

“This is a tough time for us all, no doubt about it, but it is also an opportunity for all levels of government, the community, and businesses to come together and support each other as we move towards recovery.”

Independent analysis shows increasing Financial Assistance Grants to at least one percent of Commonwealth taxation revenue would also create 16,000 jobs and add around $2.37 billion per year to Australia’s GDP.

Cr Clark said councils are also calling for an immediate and once-off $1.3 billion injection of Financial Assistance Grants to boost local economies.

Every council in the state is feeling financial pressure after two years of the pandemic. The costs associated with recovery, alongside increasing maintenance and services costs, and Victoria’s rate capping policy has left many councils with difficult decisions about their service delivery.”

“This once off injection of Financial Assistance Grants would create more than 13,000 jobs and add significantly to our GDP,” Cr Clark said.

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