THE Municipal Association of Victoria believes small rural councils are struggling.
The MAV told a parliamentary inquiry on Wednesday that a reduction in state and federal government funding combined with the two per cent rate cap has left these councils grappling with maintaining local services and assets.
But Campaspe Shire believes it isn’t one just yet.
Despite mayor Adrian Weston saying they had lost $1.4 million annually for the past three to four years which would normally be spent on our roads.
‘‘It is important to make the distinction between small rural councils and large rural councils like ours,’’ Cr Weston said.
‘‘Although at the moment we aren’t struggling in the medium to long term, this is definitely a possibility.
‘‘A three-year freezing of increases to the Financial Assistance Grants and cessation of the Country Roads and Bridges funding has impacted council’s ability to address our priorities.
‘‘We know roads are important to our community. This comes through loud and clear in community surveys, in service requests, in feedback on the street.
‘‘Our funding however is limited and works are prioritised in order to meet the highest needs, such as school bus routes, transport routes and high traffic volumes.’’
The MAV presented at the public hearing of the ongoing inquiry into the Victorian Government’s rate capping policy.
MAV president Mary Lalios said financial projections produced by Local Government Victoria indicated that capital spending in small rural shires would decline by 30 per cent from 2016-20.
‘‘In the next two or three years we are going to see serious impacts on councils’ ability to meet their community service and asset renewal obligations, particularly in smaller councils,’’ she said.
‘‘Rural councils each lost around $1 million a year for their local road maintenance when the State Government did not renew the Country Roads and Bridges Program in 2015.
‘‘On top of this, the Federal Government’s three-year freeze of Financial Assistance Grants indexation cost Victorian councils around $200 million for local infrastructure and community services.
‘‘While we welcome the Federal Government’s decision to restore indexation, the three-year freeze has left a significant ongoing funding gap.
‘‘It is critical that these funding cuts are reversed. Under the two per cent rate cap, we are starting to see small councils really struggling to deliver services and capital works programs.’’