HINDMARSH Mayor and Rural Councils Victoria chairman Rob Gersch has hit out at the Victorian Grants Commission’s funding model, which considers population when allocating money to councils.
Cr Gersch said it was imperative small rural councils were not punished because of population loss.
Hindmarsh Shire Council’s draft annual report states the municipality’s population dropped by 7.6 per cent from 6275 in 2001 to 5798 in 2011.
“This population decline is affecting council’s funding, particularly with regard to the money we receive through the Victorian Grants Commission, which this year totals about $4 million,” the report said.
“These grants are partly assessed on the basis of population numbers, which is placing downward pressure on this vital revenue source.”
Cr Gersch said he would be surprised if the figures were still relevant.
He believed the shire’s population had since stabilised, and the community was well placed for economic and population growth.
“But it is still a concern if the powers-that-be are looking at funding based on population,” he said.
He said population decrease was a common challenge for small rural councils.
“The problem with that is you still need to provide services – it still costs the same amount to run your business,” Cr Gersch said.
He said the methodology was flawed and seriously needed to be reviewed.
“It has to be looked at as a community-based operation, rather than on a population basis,” Cr Gersch said.
He said small rural councils would not be able to survive if they did not have enough financial support to maintain their services.
Hindmarsh Shire Council has prioritised initiatives targeted at population and economic growth in its council plan, including appointing an economic development officer.
Wimmera Development Association executive director Jo Bourke said community infrastructure needed to be maintained, whether there were 95 people using it or 100.
“We quite often argue the economic productivity of the region should be taken into account, rather than the population,” she said.
“The bottom line is that we still need to be generating jobs to attract people who are going to drive the economy.
“It’s about building on what we’ve got to retain more young people and attract the skills we need.”