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$24.5m blow to Campaspe Shire's bottom line

The Federal Government has frozen the expected annual increase on Federal Assistance Grants which council had allocated in its draft Budget.

ELAINE COONEY May 28, 2014 3:20am

Campaspe Shire councillors promised services would not be cut in the 2014-15 Budget following a Federal Government grant cut.

The cut could see a loss of $24.5million throughout the duration of Campaspe Shire’s 15-year plan.

The shire receives about $10 million in Federal Assistance Grants annually with a 4 per cent increase each year.

The government put a freeze on the increased amount which will mean a $460,000 loss to the shire this financial year and $2.7 million over three years.

Councillor Paul Jarman said the announcement of the freeze came eight hours after Campaspe Shire released its draft Budget.

He said the estimated $460,000 had already been factored into the Budget so it was the role of councillors to find savings from different sources.

Cr Jarman said services would not be cut this year, but it may have to be looked at in next year’s budget.

The funding cuts equated to 1.5 per cent in rates, he said.

Council ruled out any further rate rises in 2014-15 as a result of the cuts, but long-term plans would be affected.

‘‘The communities will not notice a difference,’’ Cr Leigh Wilson said.

‘‘We’ll be looking at (reducing) things, like some of the increased capital works.’’

Cr Jarman said council would make service delivery more efficient through an information and communications technology revamp.

He said the push was on to remove as many unnecessary council assets as possible.

Cr Neil Pankhurst hoped the way the Federal funds were dispersed to councils would change.

He said Municipal Association of Victoria chief executive Rob Spence had gone in to bat for local councils with the Victorian Government’s grants commissionwhich disperses Federal Assistance Grants.

Cr Pankhurst said it was unfair smaller councils suffered the same cuts as city councils when there was a large difference in the number of ratepayers.

‘‘It will affect regional councils more,’’ he said.

Cr Wilson said he was ‘‘bitterly disappointed’’ by the Federal Government’s decision to freeze the funding increase.

He said the State Government benefited from GST and the Federal Government gathered revenue from income tax, but local government relied on grants and council rates to generate revenue.

Cr Wilson said infrastructure would suffer in the long run due to the freeze.

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