Minister for Local Government Jeanette Powell
With revenue of nearly $8 billion, local government represents approximately
12% of the Victorian economy. The sector is an important partner in the task of building for growth. The budget season brings this important contribution into sharp focus.
First, local government is a significant sector in its own right, constituting a large proportion of
Victoria’s economy.
Second, it’s a delivery agent for the State
Government in a whole range of human services and economic development activity that is crucial to Victoria’s wellbeing.
Third, it is the critical partner in the delivery of regulatory functions in the areas of planning, food, health and safety, road management and economic development.
To ensure the sector remains strong and accountable, we are working with you on several initiatives which together make up the Local
Government Reform Strategy. This reform agenda is brought together by the renegotiation of the Victorian State-Local Government
Agreement (VSLGA).
To date the VSLGA has been based largely on a high level aspirational statement. My intention is to move it into a much more operational space by late 2013. We want to make sure that everything the VSLGA is doing facilitates various aspects of reform that are underway in strengthening local government.
The individual local government portfolio initiatives are:
This project has arisen out of work that has come from a range of spaces but most particularly the
Victorian AuditorGeneral’s observation that performance reporting in local government has not been to a satisfactory standard. It is important to have measures that will inform the community of their local council’s relative performance.
There are three discreet phases to this project, the first is to develop an initial set of indicators in 2013, and the second is to voluntarily trial a system for a year from July 2013. From July
2014 legislation will be in place to make reporting against the framework mandatory. The project is being advanced by three technical working groups who are actually developing that set of indicators right at this moment.
The Local Government Interdepartmental Network
(LGIDN) has been asked to review the streamlining recommendations of the Essential
Services Commission’s report into reducing unnecessary red tape for local government. Using the LGIDN, we have been working across the
Victorian Government to see which recommendations can be implemented and find further opportunities for streamlining. A total of 35 current reporting requirements are being considered for reform and I intend to detail further reforms which can be put in place in 2014.
Further projects in the areas of shared procurement and improved asset management are being considered. Local Government Victoria is examining broad policy options to support councils to contain their costs. Cabinet endorsement will be sought to proceed with deeper analysis of cost drivers in specific areas of local government by late
2013. There may be a role for the Essential
Services Commission in benchmarking costs in the sector, and this work is currently being scoped.

Expressions of Interest were sought from councils for a set of sustainable procurement and asset management pilots, which will be in place by June and August respectively. These capability building projects will demonstrate the sorts of efficiencies that have been gained through shared procurement achieved under the Local
Government Reform Fund.
The Better Services Implementation Taskforce has recently agreed to initiate a project which will review all funding flows by December 2013 between the State and local governments, and to propose and agree reforms to those funding arrangements by July 2014. Importantly any new arrangements should offer incentives based on productivity for local government by aligning funding planning, minimising transaction costs and incentivising local responsibility and flexibility against minimum program standards.
Scoping, directions papers and consultation are currently in development in relation to three major pieces of work which will in turn lead to legislation on:
• Councillor Conduct and Governance
• Electoral Administration Reform
• Performance Reporting and Accountability
Requirements
Consultation with the sector will directly shape the development of these legislative amendments.
The Ministerial Advisory Committee (MAC) consultation on the future of the Victorian library system – Stage 2 consultations have concluded and the MAC will consider a reform strategy to see if there is support within the sector to create a
Victorian library system.
An important reform agenda is underway in local government. The focus is to assist the sector to become a more efficient and productive component of the Victorian economy that recognises its role and obligation to the community to support economic and population growth. It is a large agenda and will only be possible by us working together.
The 2013 –14 budget for Local
Government ($58.6 million) is focused on supporting local government in the continuous development of good governance, sustainable service delivery and asset management policies and practices.
Local Government Victoria will sit in the new Department of Transport, Planning and Local Infrastructure. The new department will bring together a stronger focus on a coordinated approach to land use and transport infrastructure planning to meet Victoria’s future growth. Working together will allow us to achieve the following objectives:
• an integrated and sustainable transport system that contributes to a prosperous, inclusive and environmentally responsible state;
• efficient and effective planning, building, heritage and local government systems, and support for Victoria’s sport and recreation sector, that ensures Victorian cities and regions are competitive and sustainable; and
• authoritative, comprehensive and easily accessible land administration and land information to underpin effective decisionmaking and appropriate use of land.
The 2013 –14 Budget provides an estimated $859.5 million in grants and transfers to local government. This represents an increase of almost $200 million over the past three years from the amount estimated in in the 2010 –11 budget, which was $672 million, showing that the local government sector continues to be a priority for the Victorian Government.

Published by
Department of Planning and Community Development
1 Spring Street Melbourne, Victoria 3000
Telephone (03) 9208 3333
June 2013
© Copyright State Government of Victoria 2013.
This publication is copyright. No part may be reproduced by any process except in accordance with provisions of the Copyright Act 1968
Authorised by the Victorian Government,
Melbourne