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Community facilities Roads | November 24, 2016

Auditor General raises red flag on local government

The state’s Auditor General has raised serious concerns about the financial sustainability of Victoria’s small councils in an audit tabled in the Victorian Parliament today.

The Nationals Member for Lowan, Emma Kealy MP said the report revealed how Labor’s cuts to funding programs for small rural councils were hurting local government.

“The report highlights the magnitude of the challenge facing Ararat Rural City, Hindmarsh, Northern Grampians, West Wimmera and Yarriambiack shire councils as a result of the deep funding cuts by the Andrews Labor Government,” Ms Kealy said.

“The Auditor General has warned that the funding reduction to the state’s small shires will adversely affect service provision and see less money spent on asset maintenance and renewal.

“The State’s 19 small shires which included Ararat Rural City, Hindmarsh, Northern Grampians, West Wimmera and Yarriambiack shires had recorded a combined net deficit for the 2015-16 year. This deficit is due in part to Labor’s funding cuts.

“Local councils were receiving $1 million every year to help maintain country roads and bridges when The Nationals were last in government. The Nationals also provided funding to assist local governments build or upgrade infrastructure.

“Roads are deteriorating and councils are unable to proceed with important local infrastructure projects.

“Incoming Councillors have significant challenges to deal with as a result of these funding cuts,” she said.

The Auditor General has warned ‘…the small shire council cohort is facing an increased financial sustainability risk, with budget projections for the next three financial years showing a fall in expected revenue. This will reduce the funds these council have available to invest in new and replacement assets which may adversely affect the services they can provide to their communities’ (p.9).

“Small councils across the state are forecasting a 42.5 per cent reduction in capital grants,” Ms Kealy said.

“This is going to have an unavoidable impact on service delivery, the maintenance of local roads and local community infrastructure,” she said.