Greater Dandenong Council has welcomed a State Parliamentary inquiry into “cost-shifting” onto local governments.
The inquiry, initiated by the Liberal-Nationals Coalition, will report on the impacts of shifting costs from state and federal governments onto councils.
It will also investigate whether councils’ revenue models are sustainable, and if councils are delivering on their “core” services.
Local government opposition spokesperson Peter Walsh said the inquiry would look at more than council rates.
“We have to go back to square one and examine the entire funding model for local government,” Mr Walsh said.
“We need to look at what affects council’s ability to manage core responsibilities like rubbish collection, road maintenance, footpaths and libraries.
“Victorians are fed up with Labor shifting costs onto local government and forcing ratepayers to pick up the tab.”
A recent Greater Dandenong Council report stated that financial stability and sustainability was “one of the highest and most pressing” of its challenges.
It faced increased energy and construction costs, rising wages and widespread skills shortages, as well as being “hurt” by rate capping.
“The key challenge over the next decade will be keeping rates affordable by meeting the rate cap as pressure on other revenue sources combine with key service and construction costs growing quicker than the rate cap.”
Greater Dandenong mayor Eden Foster said the council “at times need to rely on the generous funding of our state and federal government partners”.
“However rate-capping, climate change, waste management, cyber security, maintenance of our assets and infrastructure, business continuity and economic recovery pressures from the pandemic continue to put further pressure on our budget.
“All Councils in Victoria are committed to delivering a budget and long-term financial plan that is prudent.
“However I am sure there are efficiencies that could be gleaned from an inquiry to ensure the funding model between all levels of government is sound and efficient in the best interests of our community.”
A Government spokesperson criticised the inquiry.
“Dictating to councils what services they are and are not allowed to provide to their communities would be totally inappropriate.
“We continue to work with all councils to ensure they have the support they need.”
South-Eastern Metropolitan Labor MP Michael Galea said he was a “little wary“ of the basis of the motion coming from a source of contempt.
“It all but states the desire to have local councils not function fully as a level of government,“ he said.
“The motion would prefer to see councils deliver on a list of highly defined authorised services dictated by the state government.“
In 2015, the State Government introduced the ‘Fair Go’ rates cap – which curtails council rates rises.
This year, councils have been allowed their highest rate rises of 3.5 per cent since the cap’s inception.
The Economy and Infrastructure Committee inquiry’s report is due by 30 June 2024.
