Councils across Western Australia have collectively hit out at their state government for over inadequate funding for the crucial metropolitan local government reform process in the latest state Budget, a shortfall many fear could force them into the unpopular position hiking rates to cover the high cost of mergers.
In the government’s unveiling of its 2014-15 State Budget, Treasurer Mike Nahan spruiked a surplus of $175 million over the next financial year.
However local governments have expressed their disappointment that the State Budget has “failed” to provide adequate funding for Mr Barnett’s ambitious plan to reformat metropolitan local government areas.
This was a controversial plan that became apparent in November 2013 when Mr Barnett announced that Perth’s 30 councils would be slashed to 15.
Now the local government sector is fuming because of the state government’s seemingly lack of consideration for the high costs of boundary changes and amalgamations, as councils will now face the grim prospect of having to fund these proposed mergers from their own coffers.
The problem was detailed by the Western Australian Local Government Association (WALGA), which stated that the majority of State Budget’s allocation of $60 million over three years for metropolitan local government reform will be as low interest loans to councils.
WALGA is concerned that the funding detailed in the State Budget consists of only $5 million for each of the next three years with metropolitan local governments able to access low interest loans from a $45 million funding pool.
The rub for WA councils comes from WALGA’s estimate that between $65 million and $100 million would be required to implement the changes in the metropolitan area.
The Association compared the Barnett government’s funding with that of Queensland when it initiated its own controversial and unpopular council reform, in which it contributed $51 million – a quarter of the actual cost of local government mergers.
WALGA President Troy Pickard said the allocation of a “meagre” $5 million this year to metropolitan local governments won’t fund one merger, “let along the dozen or so required to meet the government’s agenda”.
He accused the government of kicking an “own goal” in the progression of its reform agenda, which he feels will lead to councils having to hike up their rates.
Mr Pickard said this “will make it even more difficult to convince rate payers on the benefits of reform”.
“Local Governments are already under significant strain due to the organisational impact of reform, this decision will place further burdens upon administrations, adversely impact operations and place unnecessary financial stress on communities,” he said.
Mr Pickard boldly rejected any offer of loans and called on the state government to fully fund a process that it has driven by immediately making available the “lion’s share” of the approximate $65 million that will be required to facilitate structural reform.
“The State Budget announcement is a slap in the face for many local governments who have participated in good faith in the state government’s reform agenda for more than five years,” Mr Pickard said.
He said it is time for the state government to “stump up or stop the process”.
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