The region’s councils will continue to slide financially unless major changes are made to the way they are funded, according to Jenny Dowell, president of the Northern Rivers Regional Organisation of Councils.
Cr Dowell said the Federal Government’s decision to freeze Financial Assistance Grants over the next four years would have a detrimental impact on the ability of councils to provide services and infrastructure.
She acknowledged that her council, Lismore City, had received a doubling of funding under a separate program, Roads to Recovery, but that would be offset by estimated FAG losses..
‘We did receive a doubling of the Roads to Recovery funding this year but the underlying message is that we also need the FAGs funding and the decision to freeze that for four year will make it difficult.
‘Last year the state opposition assessed every council and they estimated that Lismore would have an estimated loss in revenue of $2.4 million over four years,’ she said.
‘That’s a $600,000 loss each year under the (FAGs) formula they used last time.’.
Cr Dowell said the Federal Government needed to make some tough decisions in the way it provided the grants.
She said wealthy councils in city areas always received the minimum FAGs funding despite not having the same infrastructure costs that rural and regional councils were faced with.
‘Some of those city councils receive more in parking fines than we receive in funding, she said.
Meanwhile, the NSW Minister for Local Government Paul Toole this week said he was concerned at the number of councils both in Sydney and regional NSW that were struggling financially.
‘Councils have told IPART (Independent Pricing and Regulatory Tribunal) that without significant rate increases they would not be able to provide essential services and reduce their infrastructure backlogs
“In the last two years alone, one third of the State’s councils have asked ratepayers to pay more. Councils are advising IPART these rate rises are to repair infrastructure and that they would be financially unsustainable without them.”
“This is not viable in the long-term.”
Minister Toole said the NSW Government had been working in partnership with councils on its Fit for the Future reforms.
‘The Fit for the Future reform process aims to ensure councils are able to deliver more infrastructure, better services and put downward pressure on rates.
‘We’re trying to strengthen the local government sector so we have a better system of local government and to ensure mums, dads, families and pensioners don’t continually have to pay more for basic services.
‘The community deserves every council in NSW to be looking at its financial sustainability, scale and capacity and asking how we can deliver a stronger, smarter local government sector for NSW.’
Local Government NSW President Keith Rhoades AFSM said the Government was using a problem created by it and its predecessors to justify the ideologically-driven agenda of forced council amalgamations.
‘It is this Government that set the Fit for the Future financial benchmarks which councils are now scrambling to meet via the rate variations he is so quick to attack,” Clr Rhoades said.
‘Rate-pegging maintained by this and previous Governments has choked Council revenue for decades.
‘Yet at the same time cost shifting has moved funding responsibility for infrastructure and services off State Government books, and onto the shoulders of Local Government.
‘The rate variations granted by IPART would simply not have been necessary without years and years of rate pegging and cost shifting, or if Governments had not failed to address the myriad of other problems with the Local Government funding model.”
Cl Rhoades said it was particularly interesting for Mr Toole to express alarm about rates now, at the very time the Baird Government was moving to force Council amalgamations.
The Baird/Toole Fit for the Future package actually offers council an easier process to increase rates as an incentive to amalgamate,” he said.
Mr Rhoades said it had been estimated that forced amalgamations by the NSW Government would actually cost ratepayers an additional $445 million.
‘Moreover, a number of councils have told us they believe amalgamation will actually lead to more rate rises, because rates will have to rise to cover any infrastructure backlogs in neighbouring councils with which they may be forced to merge.”
Cr Dowell said local councils on the north coast had made it clear they did not want to amalgamate.
She said suggestions that Lismore and Kyogle councils should join forces had been rejected by both councils.
‘Kyogle is going down the line of wanting to remain a rural council and why they want to stand alone.
She said with Kyogle’s backlog of infrastructure works on bridges, the answer was not a forced amalgamation, but more federal infrastructure money to addess the backlogs.
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