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 Cr 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,” Cr 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.”
A spokesperson for the Australian Local Government Association said 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).
Brett Luxford, Chief Executive Officer of Mitchell Shire, said the Shire is also reliant on traditional sources of funding like rates, as well as State and Federal Government grants to meet the needs of our communities.
“Mitchell Shire is keen to see the results of Rural Councils Victoria’s survey as we are always looking for new funding streams to support and improve our Shire and the lives of our residents” Mr Luxford said.
"Our large service area and lower rates base means this is a significant challenge and good reason to look for alternative sources of funding.“
The ALGA spokesperson said 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.
“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.” the ALGA spokesperson said
Cr Brown said Government support is often highly conditional and sometimes insufficient for 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.” Cr Brown said.
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.
“It will be interesting to see what other councils are doing and if we can adopt a similar approach. Because every extra dollar we get helps us to prepare Mitchell Shire’s growth and better deliver projects, services and initiatives for our communities” Mr Luxford said.
The survey closes on Friday, August 25.