1 Victoria Grants Commission 2015 Rural Councils Victoria: Mayor, Councillor & CEO Forum 14 May 2015...
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Transcript of 1 Victoria Grants Commission 2015 Rural Councils Victoria: Mayor, Councillor & CEO Forum 14 May 2015...
1
Victoria Grants Commission2015
Rural Councils Victoria: Mayor, Councillor & CEO Forum
14 May 2015
Financial Assistance Grants for Rural Councils
2
The Commission
• Commission members:
- John Watson (Chair)
- Michael Ulbrick
- Julie Eisenbise
• The Commission allocates Commonwealth financial assistance grants to local government (comprising general purpose grants and local roads grants).
• Funding is allocated between councils on the basis of agreed national principles, the most important of which is consideration of each council’s relative needs to receive funding.
• The funding is not tied to specific purposes.
3
Indexation “Pause”
• The national funding pool is usually indexed annually in line with population growth and inflation forecasts.
• In the May 2014 Budget, the Commonwealth Government announced that indexation would be “paused” for 2014-15 and the following two years.
• The Commission estimates that this will reduce financial assistance grants to Victorian councils by $200 million over the four years to 2017-18.
• If indexation resumes as planned in 2017-18, it will be from a base that is about $64m below what would otherwise be the case – and this gap will continue to grow.
4
Growth in Financial Assistance Grants
-
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
$ m
illio
n
Grants - previous yearsGrants - 2014 Budget forecastsGrants - projected from 2018-19Grants - if maintained at 4%
Financial Assistance Grants
$64.1m
$87.7m
5
2015-16 Estimated Allocations - Victoria
General Purpose Grants $ 394.575 M (+0.2%)
Local Roads Grants $ 145.022 M (+0.0%)
Total Victorian Allocation $ 539.597 M
6
Mildura
West Wimmera
Warrnambool Corangamite
Moyne
ColacOtway
Surf Coast
Greater Geelong
Golden Plains
South Gippsland
Bass Coast
Latrobe
Cardinia
Baw Baw
WellingtonYarra Ranges
Indigo
Wangaratta
Wodonga
Greater Bendigo
Central Goldfields
Mount Alexander
Buloke
Gannawarra
Ballarat
Moorabool
Pyrenees Hepburn
Mitchell
Strathbogie
Greater Shepparton
Mansfield
MoiraCampaspe
Northern Grampians
Loddon
Swan Hill
Yarriambiack
Hindmarsh
Southern Grampians
Ararat
Macedon Ranges
Murrindindi
Horsham
Glenelg
Alpine
Towong
East Gippsland
Benalla
Data for 2013-14 financial year.
Financial Assistance Grants
Financial assistance grants account for more than 10% of the recurrent revenue base of most
rural councils. A number of small rural councils receive 20% or more of their revenue from these grants.
Greater Geelong
Queenscliffe
Mornington Peninsula
CaseyFrankston
Greater Dandenong
Knox
Yarra Ranges
Nillumbik
Whittlesea
Hume
Brimbank
Melton
Wyndham
Yarra
Port Phillip
MelbourneHobsons
Bay
Maribyrnong
Moonee Valley
MorelandDarebin
Banyule
Maroondah
Whitehorse
Manningham
Boroondara
Stonnington
Glen Eira
Bayside
Monash
Kingston
7
Variable Capping
• As a response to the indexation “pause” (and the timing of the announcement), the Commission adopted a variable capping arrangement for the 2014-15 allocations to minimise the impact on the Victorian councils most reliant on financial assistance grants.
2014-15 General Purpose Grants Local Roads GrantsMax. Increase Max. Decrease Max. Increase Max. Decrease
Min. Grant Councils N.A. N.A. 0.0% -2.0%
Metro/Regional Centres +3.0% -2.0% +3.0% -2.0%
Rural Councils +3.0% -1.0% +3.0% -1.0%
• Capping parameters for 2015-16 grants are still being finalised
8
Grants to Rural Councils
The proportion of funding directed to rural councils is significantly greater than those councils’ share of Victoria’s population.
28.5%
21.8%
24.4%
11.9%
10.3%
3.1%
7.9%
11.9%
19.1%
16.8%
28.5%
15.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Metro Inner Metro Other Interface Regional Centres Large Rural Small Rural
Population
General Revenue Assistance
Rural councils comprise 14.4% of Victoria’s population but receive 44.2% of the financial assistance grants pool.
9
Grants to Rural Councils
• This outcome reflects the Commission’s assessment that the relative needs of rural councils are higher than those of other councils – and that those relative needs are increasing over time.
• Changes to the allocation formula since 2000-01 have resulted in an ongoing transfer of funding from urban to rural councils.
• These changes include:
- altering the local roads model to give greater weighting to rural roads;
- introducing ‘minimum’ or ‘base’ populations for some functional areas; and
- increasing the use of factors such as population dispersion.
10
General Purpose Grants
Bass Coast
Murrindindi
Horsham
Towong
Alpine
Greater Shepparton
Campaspe
Strathbogie
Indigo
Wangaratta
Wodonga
Mansfield
Latrobe
South Gippsland
CardiniaBaw Baw
Yarra Ranges
Mitchell
Macedon Ranges
MooraboolBallarat
Golden Plains
Hepburn
Mount Alexander
Central Goldfields
Greater Bendigo
Northern Grampians
PyreneesArarat
Greater Geelong
Surf CoastCorangamite
WarrnamboolColac Otway
Moyne
Southern Grampians
West Wimmera
Gannawarra
Swan Hill
Wellington
Moira
Loddon
Glenelg
Hindmarsh
Yarriambiack
Buloke
Mildura
East Gippsland
Benalla
2014-15 grant outcomes:On a per capita basis, general purpose grants to regional and rural councils are higher than
the State average ($68.60)
Minimum (20.83)
21-50
50-75
75-100
100-125
125-150
150-175
175-200
200-300
Per Capita ($head)
300+
11
Trends – Total Grants Per Capita
Rural councils receive higher per capita grants than councils in other groups, and this trend has been accelerating over time.
$0
$100
$200
$300
$400
$500
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15*
Victoria Grants Commission - Total Grants Per Capita by Group
Small Rural
Large Rural
Regional Centres
Interface
Metro Other
Inner Metro
* Estimate data.(May 2014)
12
Movement in Grant Outcomes
… in aggregate, rural councils received approximately $123m more in 2014-15 than they did in 2000-01.
Of that, approximately $57m is due to changes in the Commission’s methodology over that period (i.e. a shift in funds from urban councils to rural councils).
0
20
40
60
80
100
120
140
160
Metro Inner Metro Other Interface Regional Centres Large Rural Small Rural
$M
2000-01 Actual Grants
2014-15 Grants - Based on 2000-01 Relativities
2014-15 Actual Grants
$16.5M
$27.0M
$10.0M
$4.0M
$27.7M
$29.7M