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Labor criticises extra funding for regional and rural Victoria

Tuesday, 10 January 2012

Labor's criticism of the Coalition Government's extra funding to rural and regional councils through the new Local Government Infrastructure Program (LGIP) is lazy, baseless and shows just how out of touch Labor is with the needs of country communities.

Under the Program all 48 rural and regional councils will share in $100 million of extra funding over four years to assist with local infrastructure projects and help take pressure off the rates base of local communities.

Labor's criticism of this funding fails to stand up to scrutiny for two key reasons.

Firstly, Labor ignores the fact that the program is based on a fair and equitable formula designed in consultation with the Municipal Association of Victoria, Regional Cities Victoria, Rural Councils Victoria, Regional Development Australia Committee chairs and the Victorian Grants Commission.

The formula specifically recognises the financial difficulties sparsely populated rural shires face in financing infrastructure projects. It involves the following steps to derive an initial allocation to each municipality:

  • The 10 largest regional cities each receive a fixed allocation of $2 million
  • The other 38 rural councils are notionally allocated an initial base funding grant of $1.5 million, and
  • The remaining funds are allocated to the 38 councils using the Victorian Grants Commission's population dispersal formula;.

Caps are then applied so that:

  • No council receives more than $2.5 million
  • No council receives more than 4 per cent of the "carrying value" of its infrastructure (the value of building assets and construction/infrastructure assets).

The system is fully transparent and the allocation to individual councils is published on the RDV website.

The formula takes into account the findings of the Whelan report which identified 18 small rural councils that do not have the financial capacity to adequately service the infrastructure needs of their communities. These smaller councils were ignored and starved of funding over 11 years of the previous Labor Government.

Secondly, Labor ignores the facts in relation to electoral representation in regional and rural Victoria. Labor holds eight of the 25 lower house seats in rural and regional Victoria – less than one third. Therefore, it is common sense that the majority of funding under the Program goes to Coalition represented regions.

Labor's criticism is lazy and once again fails to represent the views of everyday regional and rural Victorians. Over 11 years of government Labor lost touch with regional and rural Victoria and in opposition has produced no new policy ideas and simply resorts to baseless criticism.

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