The peak body representing Victoria’s 38 rural local government areas is leading a nation-wide research project to find innovative ways for financially struggling councils to engage new income streams.
As part of the research, local governments across Australia are being surveyed about existing practices and potential opportunities for raising additional revenue via alternative “own-source” income streams (excluding rates, fines, fees, grants and contributions).
Rural Councils Victoria chair Mary-Ann Brown said local councils wanted to be less reliant on state and federal levels of government for their income.
“Councils would like to be more independent, in the sense of not relying on other levels of government for funding,” Councillor Brown said.
“If we can identify other sources of income over which councils have control, that would be a very good outcome for communities and councils.
“We really need to try to get away from the cap-in-hand or begging-bowl approach.”
The Australian Local Government Association says local government revenue comes from three main sources — taxation, such as rates (about 38 per cent of total revenue), user charges/sales of goods and services (28 per cent) and grants from federal and state/territory governments (14 per cent).
The ALGA adds, however, that for some rural and remote councils where revenue-raising capacity is limited, grants can account for more than 50 per cent of council revenue.
“The capacity of local governments to raise revenue is important to their financial sustainability and their ability to promote the wellbeing of their local communities,” the ALGA says on its website.
“Unfortunately, across Australia many local governments have insufficient revenue-raising capacity to maintain or upgrade their significant infrastructure holdings or provide the level of services that their communities desire.”
Rural Councils Victoria said in outer areas there were fewer ratepayers to fund the expenses that councils faced.
“Rural councils cover vast areas with massive road networks that need to be maintained, but have very few ratepayers to pay for all the services that communities need,” Cr Brown said.
“Government support, while always welcome, is highly conditional, all too often not sufficient and can’t be spent on what communities actually require.
“No two councils are identical, but we believe that this research can help unearth innovative ideas that can be used by councils across Australia to bring in some of the funds needed to serve our communities better.”
Rural Councils Victoria has engaged consulting firm SGS Economics and Planning to undertake the research, which will be shared with all councils in the country.
“Not every idea will work for every council, but councils must do something to alleviate the pressure on ratepayers at a time of increasing interest rates and surging inflation,” Cr Brown said.
The survey closes on Friday, August 25.