‘They’re screwing us big time and we’re not going to take it’: Glen Eira mayor Jim Magee

Councils have lashed the Victorian government for passing on the cost of projects and services they say aren’t their responsibility, and resulting in ratepayers footing the bills.

Glen Eira Mayor Jim Magee says his council will be forced to cut services as it “can’t afford to keep it going”. Picture: Derrick den Hollander

Victorian mayors have accused the state government of “breathtaking” hypocrisy by palming off tens of millions in costs they should be paying and forcing councils and ratepayers to pick up the bill.

A major backlash is growing among councils as they claim their budgets have been smashed by being forced to pay for projects and services that aren’t their responsibility.

The problem will be probed in a parliamentary inquiry and local governments are heavily lobbying the Andrews government for action as a number one priority.

Tensions were inflamed last month after the Premier incorrectly tried to link council rates to an analysis showing Victoria as the nation’s most taxed state.

Boroondara Mayor Felicity Sinfield lashed the comments.

“Daniel Andrews’s ill-informed comments in the media blaming council rates for the state’s mammoth tax bill were disappointing and unfair,” she said.

“All councils are confronted with significant losses due to Covid-19, escalations in construction and maintenance costs and increasing demands for services. Added to this financial challenge is the cost of the state government shifting responsibility for funding its services to local government.”

Cr Sinfield said this year alone Boroondara would pay $16m in costs they say have been shifted upon them by the state government.

This includes libraries, building projects for early childhood education such as free kinder, road network upgrades, social housing and clearance for power lines.

“This equates to four years of rate rises and is money the Council could have chosen not to request from its community,” she said.

The Andrews government is being accused of “breathtaking hypocrisy”. Picture: Ian Currie

Cr Sinfield said the state had introduced new tax measures to recoup what it spent during Covid, but then limited rate increases for local government to 3.5 per cent despite independent calls for a 4 per cent cap.

“The hypocrisy is breathtaking,” she said.

“All ratepayers in Victoria are subsidising cost shifting by the state government to their Council and it is time this is called out.

“The Premier and his colleagues need to accept responsibility for either providing or funding their share of services being undertaken by local governments.

Municipal Association of Victoria president David Clark said rates made up just 3.5 per cent of the national tax take and caps meant budgets were either flat or going backwards.

“By contrast State Government revenues will rise by 25 per cent in the next four years,” he said.

“As we care for the same Victorians, the state government should be focusing on a partnership with Local Government, not a blame game.”

Glen Eira mayor Jim Magee said his council was weighing up what services it could cut back.

“We’re going to have to cut some services, we can’t afford to keep it going,” he said.

“The first $19m of my rates pay for what the state and federal government used to pay for and never do.”

“I’ve been trying to get all the mayors in Victoria to do a cost shift and financial sustainability audit to show the full scale of the problem.

“They’re screwing us big time and we’re not going to take it anymore.

Municipal Association of Victoria president David Clark. Picture: Zoe Phillips

Mornington Peninsula Shire Mayor Steve Holland said cost shifting was a “dire and unfair financial burden on all municipalities”.

“For the Mornington Peninsula Shire, we estimate this is costing our community more than $28M per year – approximately 10 per cent of our annual budget – with no means of recouping those costs,” he said.

“This creates an eye-watering annual shortfall, requiring us to reduce the services or infrastructure projects we deliver for our community, or increase fees and charges at a time when many in our community are struggling with rising costs.

“We join other councils in calling for the state government to fund their share of services being undertaken by local governments.”

Greater Geelong Mayor Trent Sullivan said the city was hit particularly hard by diminishing state government payments for libraries.

“We need to see a return to something closer to the historical funding split between the state government and local councils.

“The state government and councils traditionally shared the cost of operating libraries 50-50. “Over time, the state’s contribution has dropped to around 20 per cent, with councils now bearing about 80 per cent of the cost.”

A state government spokesman said: “We are a strong supporter of local government and talk regularly with councils about common interests.”

Geelong mayor Trent Sullivan. Picture: Alan Barber

“The Fair Go Rates System limits uncontrolled rate hikes and has consistently reduced cost-of-living pressures for Victorians.”

Opposition local government spokesman and Nationals Leader, Peter Walsh, said:

“Year after year, the Andrews Labor Government shifts costs onto local councils and squeezes every ratepayer cent they can to prop up pet projects and their budget bottom line,” he said.

“In last month’s brutal state budget, Labor cut the local government budget in half and ended the Community Infrastructure Loans Scheme for councils to access no-interest loans to support libraries, parks, community centres, and housing.”

“In fact, the state government has shifted $73 million onto local government to run vital public libraries.”

“With less than a thousand days to go, there are deep concerns that Labor will force local government to fund part of the state spend for the upcoming Commonwealth Games.”