ARARAT - Ararat Rural City Council's 2008/2009 budget, including a 9.6 per cent rate rise, was adopted this week despite two councillors recording their vote against adoption of the budget.
Since Council's release of the draft 2008/2009 budget in June and a unanimous adoption of the draft by all councillors, Cr Gwenda Allgood and Cr Colin McKenzie reversed their decision, citing discussions with concerned and angry ratepayers since the release of the draft budget as the catalyst for their vote against the 9.6 per cent rate rise.
Council received 25 written submissions after releasing its draft budget.
Council's general manager corporate services Paul Brumby, in a report to council, said while it was widely accepted that council needed to do more regarding service delivery, the key concern of most submissions appeared to be who should pay for the increased services demanded by the community.
"A strong theme coming from the rural sector is that council needs to divert more of its current expenditure away from urban Ararat and into rural road infrastructure,'' Mr Brumby said in the report.
"This concept is at odds with the theme coming from Ararat residents that council should spend less on road infrastructure. However, most respondents have identified the need for council to obtain a fairer share of both Federal fuel tax and GST revenue.
"The primary focus of most submissions appears to be with regard to how the budget affects them personally in the short term, hence the diverse opinions.
``However, council is elected to represent the whole community and must make decisions in the best interests of the entire community in the long-term.''
Mr Brumby said in the report that some of the submissions picked up on the major structural funding issues faced by council.
One submission identified the need for `making user pays system support more council assets'.
``Road infrastructure is by far Council's biggest asset and a form of `user pays' currently exists via fuel taxes,'' Mr Brumby said.
``However, council as the asset maintainer is not receiving a fair and proper share of the fuel taxes which Federal government charges to the road users.
``The move from livestock production to grain production has brought more income and wealth to council's farming sector and has placed a far greater demand on council's road network.
``As a result of the move to grain production the amount of fuel used by council's farm enterprises has increased many times over, but the increase in fuel taxes returned to council has been minimal in comparison.''
Mr Brumby said another theme evident in a number of submissions was whether a property based tax is the best way to fund local government in the 21st century.
``Municipal rates acts as a wealth tax on property assets controlled by ratepayers and this method of funding local government has been in place for over 150 years,'' he said.
``Over that period of time the world has changed enormously, yet the primary funding model for local government remains largely unchanged from the days when Ararat was two days from Melbourne by stage coach.''
Taking into consideration the information received in the 25 submissions, council made eight recommendations.
That Council:
- During 2008 make a deputation to the Federal Member for Transport highlighting the current inequities in the road taxing and funding principles, and requesting a fairer share of the fuel tax revenue for local government.
- During 2008 make a deputation to the Federal Member responsible for Local Government highlighting the inequities in the current property-based taxing system as the primary funding source for local government, and requesting that local government nationally receive a significantly greater share of GST revenue.
- During 2008 requests the Municipal Association of Victoria to lobby on behalf of local government for a fairer share of the fuel tax revenue for local government.
- During 2008 requests the MAV to lobby on behalf of local government for a significantly greater share of GST revenue for local government.
- During 2008 requests the MAV to lobby for an inquiry into the relevance of the current property-based taxing system as the primary funding source for local government.
- Prepare a submission on local government service and infrastructure requirements to the recently formed Federal Government Regional Development Australia to replace the existing Area Consultative Committee network on January 1 2009.
- Prepare a submission to the Rural and Regional Committee of the Parliament of Victoria's Inquiry into Regional Centres for the Future in Victoria on local government infrastructure requirements.
- Consider the submissions on the adopted Draft Budget for 2008/2009 as tabled, provide a written response to the submissions received, and thank the submitters for their interest in the budget process.