A FREEZE on council grants will cost the City of Ballarat more than $1 million over three years and may cause a rates rise, according to the council’s chief financial officer.
As part of the federal budget, the federal government announced earlier this year it would freeze indexation on Financial Assistance Grants for the next three years.
While the freeze will not affect this year’s council budget, the financial burden is expected to be more than $350,000 next year.
By 2017, it is expected to have cost the council $1.1 million.
Ballarat Councillor Peter Innes raised the issue at Wednesday night’s council meeting and called on the city to approach the Municipal Association of Victoria and Australian Local Government Association to determine what the impact would be on regional councils and whether the grants could be restored.
The city’s chief financial officer Glenn Kallio said at the council meeting the financial freeze would have a detrimental impact on the services the council provided and that the city is investigating ways to fill the revenue hole. He said one implication could be increasing rates by half a per cent next year to foot the bill.
“Increasing rates is one measure that may be taken,” Mr Kallio said.
“The council is currently trying to determine where revenue can be reduced in other projects to meet that cost.”
Cr Innes’ call follows a move by Moorabool Council which penned an urgent letter to the federal government, MAV, Victorian MPs and Labor Federal MP Catherine King seeking their support in the reversal of the proposed decision.
Cr Innes said it was integral the city acted promptly and investigated the impact of the changes as a matter of urgency.
“We need to do our part to try and get the changes altered,” Cr Innes said.
“Our community will certainty be affected by this but it is also a greater regional Victoria issue.
“We are a larger council with more resources, we need to do everything we possibly can to help our smaller neighbouring councils and reduce this impact on all residents living in regional Victoria.”
The move is expected to cut $925 million in revenue to local government by 2017-18.
The grants are used to maintain road infrastructure including roads, bridges, parks, swimming pools, libraries and community halls.
The city’s chief executive officer Anthony Schinck said the council had directed officers to contact the MAV and the ALGA to determine how the council can join collaborative action against the proposal and lobby the federal government to have the grants restored.
Mr Schinck said the council had not yet been advised by the federal government whether the freeze will be ongoing.