Federal Budget: Wimmera councils believe freeze on Financial Assistance Grants will cripple

WIMMERA council executives and mayors believe a freeze on the indexation of Local Government Financial Assistance Grants has the capacity to cripple the region’s shires.

The budget revealed Federal Government plans to freeze grant rises, which were formerly indexed according to changes in the consumer price index.

Northern Grampians Shire Council chief executive Justine Linley said the freeze would put the shire’s finances in a very difficult position.

“That several hundred thousand dollars provided by the grants, we can’t find that from rates,” she said.

“A one per cent rate rise gets us $130,000; to find $500,000 or $600,000 would put our rates increase at 15 or 16 per cent which would just not happen,” she said.

With the shire releasing a draft version of its own budget earlier in the week, Mrs Linley said many spending plans would have to be reconsidered.

“We’d have to have a very good look at what projects we need to scale back or delay,” she said.

“We’d have to have another look at the services we provide.”

She said home and community care, tourism services, childcare and other human service provisions all relied on significant contributions from financial assistance grants.

Horsham Rural City Council chief executive Peter Brown said the freeze was a concern to all municipalities.

“We had no warning of this, we are well underway with our budget and we haven’t had time to consider the loss of this revenue,” he said.

“It’s the community who misses out.” - Cr Rob Gersch

Hindmarsh Mayor and Rural Councils Victoria chairman Rob Gersch said the grant freezes coupled with State Opposition plans to cap rate increases if they are elected in November could be a dangerous combination for the finances of rural municipalities.

“The Labor Opposition is talking of capping rates and then you have a cutback in your grant funding – where do you go from there?” he said.

“There are some financial problems ahead for councils.”

Cr Gersch said rural shires did not have the capacity of metropolitan municipalities to bounce back from significant revenue losses.

“It will mean a cut back in services or any projects that may be in the pipeline,” he said.

“It’s the community who misses out.”

Yarriambiack chief executive Ray Campling said the measures were very disappointing.

“We appreciate we’ve got to share the pain but unfortunately local government seems to be an easy target,” he said.

“It’s going to have a massive impact on rural councils. 

“We’re heavily reliant on rates and we have no other avenues to generate income.”

Mr Campling said it would be unfair and unrealistic to raise rates to offset revenue losses.

He said council would begin the process of determining possible cuts to services and projects.

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