Submission to the 2014-15
Victorian Budget
Municipal Association of Victoria
March 2014
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This submission has been prepared by the Municipal Association of Victoria (MAV.
The MAV is the statutory peak body for local government in Victoria, representing all 79
municipal councils within the state. While this submission aims to broadly reflect the
views of local government in Victoria, it does not purport to reflect the views of every
individual council.
© Copyright Municipal Association of Victoria, 2014.
The Municipal Association of Victoria is the owner of the copyright in this publication.
No part of this publication may be reproduced, stored or transmitted in any form or by any
means without the prior permission in writing from the Municipal Association of Victoria.
Table of Contents
1
Introduction ............................................................................................................... 3
2
Infrastructure programs ............................................................................................. 3
2.1 Local government rural and regional infrastructure programs ................................ 3
2.2 State infrastructure to growth areas ....................................................................... 4
2.3 Powerline relocation scheme ................................................................................. 6
3
Public library funding................................................................................................. 6
4
Flood mitigation infrastructure ................................................................................... 9
5
Roadside pests ......................................................................................................... 9
6
Planning.................................................................................................................. 10
6.1 Metropolitan Strategy and Regional Growth Plans ............................................... 10
6.2 Planning reform ................................................................................................... 10
6.3 Support for rural councils ..................................................................................... 11
7
2
References ............................................................................................................. 12
1 Introduction
The Municipal Association of Victoria (MAV) welcomes the opportunity to provide a
submission to the Victorian Government’s 2014-15 Budget.
In recognition of the challenging budget conditions, the MAV has focused requests in
the submission on funding programs that will provide long-term benefits to the
Victoria, primarily through the continuation of existing or recently expired
infrastructure programs. Victorian councils have a long history of providing
infrastructure which provides economic and social value to their communities – from
roads and bridges to community facilities.
The MAV would welcome the opportunity to meet with representatives from the
Victorian Government to discuss these matters further.
2 Infrastructure programs
2.1
2.1.1
Local government rural and regional infrastructure programs
Background
The Victorian Government has, since its election, provided significant funding for
local infrastructure in rural and regional municipalities. The Regional Growth Fund,
which includes the Putting Locals First program and the Local Government
Infrastructure program, provides funds of $200 million over its first four years for
councils and local communities (additional funding is provided for strategic projects).
In addition, the Country Roads and Bridges program provides 40 rural and regional
councils with up to $4 million each over four years.
The MAV commends the Victorian Government for its significant investment in local
infrastructure projects and seeks a commitment from Government beyond its current
term.
2.1.2
Local government infrastructure and financial strength
The financial strength of local government is heavily influenced by the state of its
infrastructure. This is especially the case for rural and regional councils, where the
failure to adequately maintain and renew infrastructure creates a long-term funding
pressure. Assets that have not been maintained or renewed will have to be brought
back to a useable standard, effectively creating a liability. Significant analysis — for
example, from the Auditor-General and the MAV — has indicated that infrastructure
backlogs remain the most substantial financial challenge for local government.
The importance of infrastructure renewal is identified in the Auditor-General’s
analysis of councils’ financial strength through its annual local government audit
program. The report utilises two indicators that directly measure councils’
performance in managing their infrastructure and capital assets — the capital
replacement ratio and the average renewal gap ratio. The former measures the
extent to which capital funding meets or exceeds the degradation of existing capital
stock through depreciation. The later measures the extent of any renewal gap. At the
aggregate level, there is generally good performance on these measures. The
performance at the individual council level, however, shows considerably greater
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diversity, with many rural and regional councils facing difficulties in this area. The
recent defined benefit superannuation shortfall has placed significant pressure on the
sector’s capacity to finance infrastructure, particularly rural and regional
municipalities with limited rate bases.
The MAV has undertaken a financial strength analysis of councils since 1997-98,
which identifies financial difficulties on the basis of long-term liabilities (both debt and
infrastructure backlogs), cost structures and revenue effort. The analysis has
indicated significant improvement at the aggregate level, although there are a
number of councils that continue to face significant financial pressures.
2.1.3
Social and economic value of infrastructure
While there is little doubt that infrastructure shortfalls are a financial challenge for
councils, it ultimately has an affect on the community through sub-optimal
infrastructure. This influences the local and regional economic efficiency through the
quality of road networks (particularly for agricultural regions) as well as access to
high quality social infrastructure (such as community halls, sporting facilities, etc).
Research has supported the value of sporting activities in rural communities as a
means of increasing health and social capital outcomes (see, for example,
Townsend, et al, 2002). The Government’s investment in this type of infrastructure
has also boosted the capacity of councils to ensure that sporting and community
activities occur in good quality facilities.
The Victorian Government’s investment in local infrastructure for rural and regional
communities is of significant benefit to the financial viability of councils and the social
infrastructure available to communities.
2.1.4
Request
The MAV requests that the Victorian Government:
 Extends the Country Roads and Bridges program for a further four years
beyond 2014-15
 Commits to the second tranche of funding for the Regional Growth Fund and
renews the Putting Locals First and Local Government Infrastructure
programs.
2.2
State infrastructure to growth areas
Victoria’s population grew by over 475 000 between 2007 and 2012, of which 43 per
cent was concentrated in six growth councils in Melbourne’s perimeter. These six
councils – Wyndham, Hume, Melton, Whittlesea, Casey and Cardinia – are among
the quickest growing areas of Australia and are accommodating historically
significant population growth.
The consequences of this rapid population growth are clear: significant new
investment is required in a range of state and local infrastructure projects to ensure
the community has access to adequate health, education, community and transport
services.
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Significant work has been undertaken by the growth councils, along with the Victoria
Government to plan for future population growth. Nonetheless, significant
infrastructure gaps exist in these areas, with research commissioned by the Interface
Council Group estimating that over the next 15-years, almost $10 billion in
investment will be required to cater for increased population growth (Essential
Economics, 2013). These estimates include the construction of kindergartens,
TAFEs, primary and secondary schools, hospitals, aged care facilities and public
transport. Good quality, well located and timely community infrastructure results in
lower costs of living for residents in emerging communities and reduces the longer
term negative social and economic impacts associated with delayed or under
provision of assets.
Instruments aimed at capturing some of the value from development of greenfield
sites (such as the growth area charge) have merit as funding sources but are unlikely
to provide sufficient revenue to achieve the required project financing. Furthermore,
raising revenue through these sources can also conflict with alternative policy goals,
such as improving housing affordability.
One of the most fundamental tasks facing interface and growth areas is a need to
overcome decades of underinvestment in public transport (particularly heavy rail)
infrastructure to provide comparable service levels to existing metropolitan areas.
The cost of public transport infrastructure is likely to be significant and will require
funding from both state and federal governments.
There is a strong link between community wellbeing and transport infrastructure, due
to the access it provides to employment, recreation and community services.
Sustained under-investment in public transport infrastructure for many decades has
created inequality of access to community services across metropolitan Melbourne.
The Australian Bureau of Statistics Melbourne Social Atlas 2006 demonstrated that
jobs and services tend to cluster along the main rail lines. It is well known that
residents of poorly serviced suburbs have higher levels of car ownership and more
vehicle kilometres travelled.
The Department of Transport, Planning and Local Infrastructure’s VISTA data reveals
that residents of middle and outer ring suburbs overwhelmingly rely on private
vehicles to travel. There is a critical deficiency in transport infrastructure, other than
roads, in many growing suburbs, which restricts their capacity to attract and
accommodate increased population growth, employers and service providers.
While Plan Melbourne seeks to concentrate more population growth in existing
areas, there is little doubt that the growth areas will continue to accommodate a
significant portion of Melbourne’s future growth. Plan Melbourne estimates a 1.5
million increase in the city’s population by 2050.
Effective implementation of Plan Melbourne will require supporting and enabling
infrastructure to underpin new greenfield developments with particular focus on new
public transport infrastructure. It is essential that the Victorian Government provides
clear signals to the market, communities and councils by commencing the funding of
the infrastructure requirements which will enable the implementation of the Plan
Melbourne framework.
As an immediate step, the MAV strongly advocates for the funding of the Melbourne
Metro project, to increase the capacity of the
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Request
 Funding within the 2014-15 Victorian Budget to support the Plan Melbourne
implementation, particularly as it relates to infrastructure to support the
projected population growth in Melbourne’s growth areas.
2.3
Powerline relocation scheme
The Powerline Relocation Scheme was a highly successful Victorian Government
program that provided funding to local communities to improve the visual amenity of
powerlines in areas with high pedestrian or vehicle activity, and areas of
environmental, historical or scenic importance.
The scheme provided funding for more than 250 projects across Victoria to
implement engineering solutions, such as undergrounding and aerial bundled cabling
of powerlines, to increase the accessibility and utilisation of open spaces and
increase the aesthetic appeal of streetscapes. The project also provided a number of
safety benefits, including for elderly and disabled Victorians.
Funding for the program was based on co-contributions from a mix of sources
including councils, residents, businesses and other grant sources.
The Powerline Relocation Scheme was discontinued at the same time that new
regulations governing vegetation around powerlines were introduced, requiring
increased distances be maintained between trees and powerlines. The resulting
amenity, social and environmental impacts, particularly in urban low bushfire risk
areas, have been significant. The MAV has advocated for the development of a riskbased approach to managing trees around powerlines that balances safety, amenity
and environmental considerations. We also believe that access to affordable
engineering solutions, including undergrounding, insulating and bundling of wires, is
critical to ensure that the amenity of our communities is protected.
The benefits of street trees are significant and include reduced heat island effect,
increased property value, reduced stormwater runoff, improved habitat and
biodiversity, and reinforced sense of place and city identity. Reinstatement of the
Powerline Relocation Scheme is a practical and effective means by which the State
can enhance and preserve Victoria’s streetscapes.
Request
 $5 million per annum over four years for a reinstated Powerline Relocation
Scheme.
3 Public library funding
Public libraries are a key institution in Victorian communities. Public libraries in
Victoria are one of the success stories emanating from a very robust partnership
between local and state governments.
Their benefits are many — they promote literacy and education, provide access to IT
facilities, and support community building. Despite their importance to communities,
core recurrent funding from the Victorian Government has failed to keep pace with
the cost of delivering the service.
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The MAV has worked cooperatively with the Victorian Government throughout the
Tomorrow’s Library project and has had long-term representation on the Ministerial
Council on Public Libraries (MAC). While the Tomorrow’s Library recommendations
foreshadow a number of projects that will enhance the services delivered by public
libraries and introduce several beneficial reforms, the MAV believes that the critical
issue facing public libraries is ongoing sustainability of the service. An indexation
factor that reflects the core movement in costs for the service recurrent funding
provided by the Victorian Government is recommended. In addition, the MAV seeks a
significant and sustained increase in recurrent funding.
Underpinning the importance of public libraries services is a cost benefit assessment
undertaken by SGS Economics and Planning which found that for every dollar
invested in the sector, benefits of $3.56 were produced (State Library of Victoria and
Public Libraries Victoria Network, 2011). The benefits produced by libraries cover
several domains, including education, access to core IT services and community
building.
The economic impact assessment of Victorian public libraries estimated that the level
of economic activity supported each year is;
 $722m in Victorian income,
 $120m in Victorian added value (or gross state product),
 4430 full time equivalent jobs.
The contribution of public libraries to education and literacy is well understood — the
MAV’s previous Budget Submissions has highlighted PISA data that shows a clear
association between accessing public libraries and reading and literacy scores. This
has also been supported by the Libraries Building Communities (2005) report, which
recognised the important role public libraries play in supporting school and tertiary
education students.
Public library services provide essential IT access. Data collected by the Public
Libraries Victoria Network (PLVN) shows that public libraries provided in excess of
3.3 million computer bookings in the 2012-13 year, with a further 1.7 million wireless
sessions. Libraries are also providing significant training to the community through
digital literacy and other sessions (for example, they provided training to over 20 000
people in 2012-13 on digital literacy). Libraries have taken on providing devices for
the public to use in the library to access the internet however the capital cost of this
relies heavily on local government. Several libraries are looking at loaning out
devices, a trend already evident in Californian and Canadian libraries. Coupled with
the accessibility of services to the whole community, libraries play an important role
in providing access to broadband and technology for disadvantaged communities.
These functions in public libraries are particularly important given the increasingly
difficult economic climate. Increasing unemployment across Australia, along with
scheduled closing of major manufacturers, suggests that the state is likely to
experience challenging economic conditions. Public libraries provide facilities for
jobseekers to identify job vacancies through online sources, complete and submit job
applications. For those sections of the workforce that do not otherwise have access
to hardware/broadband or have the knowledge to participate in these ways, public
libraries are an important gateway to labour force participation.
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Libraries play an important role in building local communities. Major reviews of public
libraries have noted that libraries inherently have a community-building aspect to
their role. This includes offering safe spaces for interactions between community
members and offering meeting spaces. Various reports have noted the value of this
role: the current Tomorrow’s Library review identifies libraries’ community building as
one of the service’s key attributes and both the Dollars, Sense and Public Libraries
and the Libraries Building Communities reports identified this as a strength of the
service.
Most libraries will include community building as one of their goals. For example, the
Geelong Regional Library Corporation identifies stronger inclusive communities as
one of its three goals:
We aim to provide a place and a space that is welcoming, engaging and
accessible by all in our community who want to read, learn and access
information. We embrace and celebrate all cultures. We acknowledge and
appreciate diversity in heritage, ideas and abilities, and by facilitating
connectedness contribute to personal, community and regional growth. We
exist in and for our community, welcoming in and reaching out to all who wish
to use the library (Geelong Regional Library Corporation, 2013).
This desire to enhance their local communities is reflected in the operation of these
facilities during emergencies.
Anecdotal evidence suggests that library services are quick to respond to emergency
events – many extended their opening hours to provide a cool refuge during
heatwaves while others act in a more formal capacity. For example, libraries in
Mitchell have acted as recovery centres, with extended staffing and opening hours.
A funding partnership and a new financial agreement are sought for public libraries
for the next four years and beyond. Additional funding will allow councils to continue
to: update IT facilities, progressively introduce system changes identified by the
Tomorrow’s Library project, and update their collections.
Living libraries
The Victorian Government has been providing funding for capital projects in libraries
through the Living Libraries program. This critical program has most recently
provided $17 million over four years. A new small library now costs in the order of $4$5m. Bendigo have just opened a refurbished library for $9.5m, Melton a new library$20m and Geelong has commenced construction of their new library at a cost of
$45m. The balance of state contribution to total project costs has been eroded.
Libraries are being built more environmentally efficiently with higher standards now
than four years ago.
The maximum grant ceiling of $750,000 now does not represent the value it once did.
The MAV seeks the support of the Government to renew this program to continue to
support the construction of new libraries and the refurbishment of existing library
facilities.
Premier’s Reading Challenge program
The State Government currently partners with local government to provide reading
incentives for our young and teen population through the Premier’s Reading
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Challenge program. Under this program, $1 million per annum is provided to
purchase stock to complement the reading lists for the program. The MAV asks that
a new four year allocation of the program be funded.
Request
The MAV requests:
 Commitment to the current program funding with an appropriate indexation
factor for current service delivery
 Progressive increase in the recurrent funding over four years to increase the
total annual contribution by $10 million per annum
 $20 million over four years for the extension of the Living Libraries program,
including indexation future program indexation
 Continued funding of $1m per annum for public libraries to support the
Premier’s Reading Challenge
4 Flood mitigation infrastructure
The Government’s response to the Environment and Natural Resources Committee
report into Flood Mitigation Infrastructure and Response supported making councils
responsible management and maintenance of urban levees. Where there is a
demonstrated benefit and community support, the Government has indicated it will
contribute to new urban levees or major upgrades to existing urban levees.
Maintenance costs are to be borne by local government, applying a beneficiary pays
principle and collected through rates or special charges.
Councils will also be responsible for rural levees where there is demonstrated
community support, including a willingness to pay. The Government has not
indicated an intention to contribute to major upgrades of rural levees.
The MAV is concerned that the new policy will have a large financial impact on a
small number of councils. Work is currently underway to assess the degree of impact
and to identify those councils (and communities) that may not have a capacity to pay
for essential levee investment and maintenance.
The MAV requests further investment in local flood studies to identify priority levees.
5 Roadside pests
The issue of roadside weeds and pests and the responsibilities of parties under the
Catchment and Land Protection Act 1994, and other legislation, has been unclear
and contentious for many years. In response to ambiguities about the responsibility
for managing roadside pests, the Bailey Report analysed the costs and benefits of
managing regionally prohibited weeds and pests.
The key recommendation of the report was that regionally controlled weeds on local
roads were most efficiently managed by councils, but that there was a shared
responsibility and that the state should contribute funds.
The Government has accepted the findings of the report and determined introduced
amendments to the Catchment and Land Protection Act to implement these
recommendations. They also provided $7.8 million through to 30 June 2015 to
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councils, distributed on a road length basis, unrelated to weed density, types of
weeds, or the level of community activity.
The amendment (Catchment and Land Protection Amendment Bill 2013) was largely
in line with the outcomes of the Minister's Working Party Report. It uses the Roadside
Weed and Pest Animal Management Plan (called a Control Plan in the Working Party
Report) as the vehicle to define what is to be managed and subsequently their
responsibility.




Councils responsible for managing weeds and pests on 'municipal roads'
VicRoads responsible for managing weeds and pests on state-owned roads –
even where councils may be the road manager under the Road Management
Act.
Councils must take steps, as far as possible, to eradicate regionally prohibited
weeds.
Councils must take 'reasonable measures' to control regionally controlled
weeds. ‘Reasonable’ not defined in the legislation.
The amended CALP Act is intended to come into effect on 1 July 2014
Local government requires greater funding certainty for this responsibility and the
MAV calls on the Victorian Government to make a long-term funding commitment
beyond the current tranche of funding which expires at the end of 2014-15.
The MAV calls for funding to be based on the size of the weed and pest control effort,
based on the effort identified through each council’s Roadside Weed and Pest
Animal Management Plan. Potential annual funding levels for individual councils
should be as follows:



Small workload identified by Plan $43k
Medium workload, $65k
Large workload $91k
Depending on the actual applications from councils, the funding envelope required
would be around $4 million per annum.
6 Planning
6.1
Metropolitan Strategy and Regional Growth Plans
The Victorian Government prepared Plan Melbourne and eight Regional Growth
plans to manage growth and change across Victoria. The sector has invested a
significant amount of goodwill in these plans and is a key partner in their delivery. We
call for the state to develop a whole of government infrastructure and services plan
and finance model to meet prioritised need. This approach illustrates government’s
intentions and enables both local government and the private sector to align their
work programs and funding opportunities.
6.2
Planning reform
The planning system has undergone a significant amount of policy and process
reform, notably the Metropolitan Strategy, Regional Growth Plans, Reformed Zones,
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State Planning Policy Framework and VicSmart. To successful implement these
reforms, consequential changes will be required at a municipal level. We call for
support for councils and DTPLI to ensure schemes and process are amended to give
effect to these reforms.
6.3
Support for rural councils
The MAV calls for ongoing support for rural and regional councils through the Rural
Council Planning Flying Squad and the funding of a position within the MAV to
undertake rural and regional planning projects.
The Rural Council Planning Flying Squad has provided much needed advice for rural
and regional councils on planning matters. Assisting with upwards of 120 projects,
they have reduced planning permit backlogs and enabled councils to progress high
order strategic projects and get on the front foot. We call for this program to be
refunded to assist councils with updating schemes to align with recent planning policy
initiatives.
The currently funded rural and regional planning policy position within the MAV has
generated significant sector benefit through the project management of rural and
regional planning programs, the delivery of quarterly forums and an annual
conference. Over a three year period, the role has enable councils to collaborate of
issues of common concern, provide feedback as a sector on the regional growth
planning process and research topical planning issues, such as how to manage small
lots through the planning schemes, the financial costs of settlement patterns and the
resource implications of overlay controls.
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7 References
Townsend M, Moore J, Mahoney M. (2002) Playing their part: the role of physical
activity and sport in sustaining the health and well being of small rural communities.
Rural and Remote Health 2: 109. (Online).
Essential Economics (2013) One Melbourne or Two? Implications of population
growth on infrastructure and services in interface areas, report prepared by Essential
Economics for Interface Councils,
http://apo.org.au/sites/default/files/docs/EssentialEconomics_One_Melbourne_or_Two_20
13.pdf, accessed 29 January.
Library Board of Victoria (2005) Libraries Building Communities, published by State
Library of Victoria.
Geelong Regional Library Corporation (2013) Annual Report 2012-13
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