SUBMISSION TO THE 2009-10
STATE BUDGET
Overview
The Municipal Association of Victoria (MAV) welcomes
the opportunity to provide a submission to the 2009-10
State Budget. The submission presents the major
strategic priorities the MAV believes ought to be
considered by the Government.
Local government in Victoria provides an array of
essential community services. From local roads and
other key infrastructure, to child and aged care
services, open space, waste management and land
use planning, every Victorian is affected by, and
experience benefits from, councils.
The MAV is the peak body for local government in
Victoria and all 79 Victorian councils are currently
financial members. The views of councils helped to
shape the content of this submission.
Local government’s role has expanded steadily over
recent decades. Services previously the responsibility
of the Commonwealth and Victorian governments are
now being provided, and funded, by councils.
The world, Australian and Victorian economies face
their greatest challenges since the 1930s which
require planned government responses to boost
economic activity and employment.
The MAV believes that local government has an
important role to play in ensuring that local economic
activity is maintained, with councils playing a role in
direct employment, building important infrastructure
and facilitating building activity.
Local government is keen and capable of working
closely with other levels of government to stimulate the
economy
.
Given the scope of the challenges of the impending
economic problems, it is essential that local and State
government work cooperatively to ensure an
appropriate policy and budgetary responses are
implemented.
The MAV believes that local infrastructure projects
will be a key component of a Victorian-based policy
response to economic issues. As such, the MAV
advocates for a $62 million fund for 2009-10 for
councils to deliver infrastructure projects that will
increase building activity and local economic
activity.
Other important initiatives the MAV believe will have
positive implications for the economy include the
delivery of the Victorian Transport Plan; support to
implement energy efficient public lighting, an
increase in public library funding, and support for eplanning.
The MAV also supports the implementation of a new
IT platform for the Maternal and Child Health (MCH)
program to provide better monitoring of children’s
development.
State and local government have a long history of
working cooperatively to provide an impetus for
further economic development. With the challenges
facing the state in the coming years, there is again
an opportunity for the two sectors to work together
to drive further reform and achieve economic
growth.
The Association trusts that the issues raised in this
paper will assist the State Government in
determining its strategic priorities for the 2009-10
financial year.
Many of the issues highlighted in this submission
require a whole-of-government approach, as well as
financial commitment, towards satisfactory
resolution. The MAV is hopeful that this submission
presents a starting point for further dialogue with the
State Government.
As such, the focus of this submission is funding
opportunities that promote economic activity across
Victoria.
FEBRUARY 2009
BUDGET 09-10
LOCAL INFRASTRUCTURE FUNDING
The weakening economic climate highlights the important responsibility of government in mitigating the
downside risks to growth and employment. The MAV
strongly believes that infrastructure spending is a key
policy and budgetary response to weakening economic conditions which will provide benefits to Victorian, regional and local economies. While the economic downturn is likely to reduce GST and stamp
duty receipts, the threat of reduced or negative growth
strongly suggests Victorian investment will be beneficial.
Local government in Victoria has clearly documented
the need to increase its funding of infrastructure
through a series of reports and analyses. For example, the MAV has argued, based on its long-term financial analysis, that the major financial challenge
facing councils is to rebuild existing assets as they
deteriorate. A PricewaterhouseCoopers report for the
Australian Local Government Association found a national infrastructure backlog approaching $14 billion.
The MAV has consistently argued that additional funding should be targeted at councils with the highest
need, such as regional, rural and municipalities with
growing populations.
Page 2
Given the need for an immediate increase in demand
in the economy, this provides compelling economic
arguments for community-level infrastructure. As
such, the MAV applauds the Commonwealth Government’s decision to implement the Regional and Local
Community Infrastructure program . Similar benefits
could be achieved through the funding from the State
of a complementary program which aims to ensure
building activity in local areas is maintained.
As such, the MAV believes the State should match the
Commonwealth’s contribution to Victorian councils of
$62 million for local infrastructure programs .
Request
$62 million over in 2009-10 for local infrastructure
Delivery of the Victorian Transport Plan
In December 2008, the Victorian Government released its Victorian Transport Plan (VTP) to deliver
significant infrastructure upgrades and service enhancement to the transport network.
Councils have significant advantages in providing infrastructure as they have undertaken regional and
local planning to determine the priorities of the community.
Local government has been a strong advocate for
improved transport infrastructure and services in Victoria. The sector welcomed many of the initiatives
outlined in the Victorian Transport Plan (VTP) particularly those which expanded the public transport network or enhanced service delivery. The MAV seeks
the funding of the immediate priorities in the VTP, with
a particular priority for public transport projects.
The Commonwealth recently provided $300 million to
councils nationally under the Regional and Local
Community Infrastructure program, composed of a
$50 million strategic fund and a $250 million local project fund as a means of encouraging local employment. Of the $250 million tranche, Victorian councils
received $62 million. A further $500 million for strategic projects has been announced as part of the Commonwealth fiscal stimulus package.
These projects will add much needed transport capacity to the State and will ensure large capital projects
continue despite the global downturn. With the completion of EastLink, Victoria is well placed to commence new large scale capital projects. With private
investment likely to be falling, these projects have the
added impetus of ensuring an increased level of government investment contributes to an improvement in
statewide economic conditions.
The fund attempts to provide the building and construction sectors a fiscal boost during the complex
economic climate. Local government is well placed to
support construction activity, particularly in rural and
regional communities, while simultaneously constructing infrastructure that has long-term benefits communities.
As an essential plan to secure Victoria’s liveability, it is
imperative that the State Government delivers the
key, transformative projects which underpin the VTP.
While the Victorian Government’s budgetary position
may have deteriorated, the MAV believes that the priorities identified in the plan require urgent funding
commitment.
In addition, government expenditure focused on infrastructure development will have clear benefits for the
Australian economy by enhancing its productivity capacity. This approach would provide a firm platform
for increased growth in the medium term and could
address any potential inflationary pressures in the
Australian economy when economic recovery begins.
As such, the MAV calls for the allocation of funding in
the 2009-10 State Budget in line with the priorities
identified in the plan.
Request
Funding for the priority public transport projects under
the VTP
BUDGET 09-10
MCH IT Funding
The Maternal and Child Health (MCH) program is a universal early childhood and infant health program delivered by councils with joint funding from State and local
government. The 2008-09 State Budget made a significant commitment to improving the funding for this service and to expanded with the recent growth in the
births.
To further enhance the effectiveness of this vital program, the MAV seeks $10 million over four years to deliver a system to introduce a common electronic case
management system to improve the data use in the
MCH service.
The project will improve health and development outcomes for all children and their families and will close
the gap for vulnerable children through better monitoring, targeting and intervention.
The current service has inadequate IT infrastructure
which diminishes the capacity of services to deliver the
best possible outcomes for vulnerable children and reduces system capacity to monitor and improve service
quality. Further information for both local and State government will improve the efficiency of the MCH and
other children’s services.
The Auditor General’s Review into Early Childhood
(2007) recommended that the Department establish a
common statewide database system for early childhood
services, including improved monitoring of vulnerable
clients to assist in the development of targeted programs in local areas of need.
A common statewide database that will include: an integrated and shared data system; a cultural change program that will enhance the abilities of the practitioners
to use the system; and information and tools to enhance evidence based approaches in dealing with clients.
As such, the MAV believes this project would provide
significant benefits to the community through improved
monitoring of child health and better intervention.
Request
That the State provide $10 million over four years for
the implementation of the MCH IT project
Libraries
The MAV urgently seeks greater financial contributions
from the State Government for public libraries services.
Support should focus on the key challenges facing
councils: maintaining their operation and staffing in the
rapidly changing environment; their collections, both
electronic and paper; and improving their ICT capacity.
Public libraries are a community institution and provide
an invaluable service to Victoria’s citizens; however, the
real financial contribution of the State Government to
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the operation of public libraries has declined substantially over the past 30 years. Despite some increases in
capital funding for public libraries, there is an urgent
need for greater funding of the service.
There are 310 library service points across Victoria,
covering all 79 councils. Nearly 50 per cent of Victoria’s population is registered with a public library, and
over 32 million visits were made to libraries in 2005-06.
Although library costs have been growing, there has
been no substantial increase in staffing numbers over
this time, and the per capita employee levels have
been steadily falling.
At the same time, the State Government’s contribution
to public libraries has fallen from 23.3 per cent to 19.5
per cent. This reduced contribution has required local
government to pick up the funding shortfall.
While State grants have been indexed to the consumer
price index (and from 2004-05, population), library
costs have been growing in line with labour, technology
and book costs. Over time, this has eroded the effectiveness of grants as a source of revenue, placing increased financial pressure on services.
The Libraries Building Communities report, released by
the State Library of Victoria, provides a rich picture of
the importance of public libraries in building communities and contributing to improved literacy. It shows that
libraries benefit communities through improved literacy
outcomes, the development of social capital and a contribution to a reduction in social inequality.
The PISA project, an international study on student
academic performance conducted by the Organisation
for Economic Cooperation and Development, found
that borrowing books from a library was associated with
up to five per cent of a student’s learning outcomes.
When it is considered that the main determinants of a
student’s outcome is their natural ability and effort, a
variation of this magnitude from the provision of reading
material suggests that public libraries are a cost effective method of facilitating improved student literacy outcomes.
This positive effect is particularly salient given the increasing acknowledgement of the positive learning outcomes able to be achieved through high quality early
years programs. For the children of Victoria, access to
quality information technology and learning materials
will strongly supplement the early years agenda of the
State.
Due to a marked growth in the importance of information and communication technology (ICT) in the modern
economy, there is a corresponding risk that people will
be excluded from accessing this technology based on
their geographic location or socio-economic status.
Accordingly, libraries are playing a vital role in providing
universal access to ICT infrastructure and the Internet,
but will need to keep pace with rapid change in technology.
BUDGET 09-10
Page 4
Rural councils in particular face significant cost barriers
to increasing their broadband capacity, with increasing
bandwidth requirements driving up costs substantially.
Mobile libraries, which are essential for providing
information needs to remote communities, are finding it
increasingly difficult to provide suitable internet
services.
As such, the MAV seeks the establishment of an
appropriate cost sharing level for the service between
councils and the State, such as equal funding
responsibility for eligible crossings (50/50). This will
require an additional funding commitment from the
State.
In addition, a recent report for the State Library of
Victoria by J.L. Management Services concluded that
Victorian libraries were efficient by international and
national terms, but there were serious deficiencies in
the age of the libraries’ collections. Older book stock
and collections were having a negative effect on
borrowing and patronage.
Request
While there are undoubted issues with the current
library book stock, the MAV believes that ICT and
digital collections are becoming a more important
component of the public library system. It is therefore
imperative that additional funding be provided to
facilitate both improved collections and ICT hardware
and software.
Request
Improved funding ICT hardware and software
An increase in the recurrent funding provided to
public libraries
Children’s Crossing
Supervisor Program
State and local government jointly deliver and fund the
Children’s Crossing Program to increase road safety
and provide adult supervision of children around
schools. The benefits of the program extend beyond
road safety, including increasing community
engagement, ensuring supervisors remain active in the
community, and providing a safe environment in and
around schools.
Despite the program’s value, councils have serious
concerns about the adequacy of current funding, as
increasing traffic volumes have led to an increase in the
number of children’s crossings even through funding for
each crossing is declining.
In addition to the crossings funded under this program,
councils fund many ineligible crossings due to concerns
about community risk.
A significant issue exists for the program as the funding
model has no relationship with the true costs of
delivering the service. Many councils have expressed
concerns about the adequacy of current funding with
several reports suggesting the State’s contribution is
significantly falling and now contributes only a minority
of total service costs.
That the State undertake a review of the costs of the
children’s crossing supervisors program and increasing funding on the basis of a shared 50/50 responsibility for the program
Public Lighting
Local government is a significant public lighting
customer in Victoria, spending approximately $40
million per annum on public lighting services. The
electricity use associated with this service contributes
to between 30 and 70 per cent of councils’ corporate
greenhouse gas emissions. However, the absolute
level of greenhouse emissions resulting from public
lighting depends on the technology of the luminaires
used and there are opportunities to drastically reduce
the greenhouse gas emissions produced by this
service. This is being facilitated by the testing of new,
energy efficient luminaire technologies. Additionally,
replacement of the current technologies with new
luminaires will reduce demand on the state’s base
load electricity generation, thereby increasing the
security of Victoria’s energy supply.
A significant proportion (60 to 70 per cent) of local
government public lighting in Victoria uses 80 watt
mercury vapour (MV) lamps. These lamps use over
three times the energy of modern, energy efficient
counterparts, produce light of a lesser quality, and
cost significantly more to dispose of due to their high
mercury content.
Depending on the technology utilised, which is largely
dependent on road size, vehicle movements, and
whether vehicle or pedestrian needs are paramount,
the new technologies cut greenhouse gas emissions
by between 25 and 68 per cent. For local
government, the adoption of energy efficient lanterns
would appear to be a suitable replacement for the
current 80W MV lamps and would result in electricity
savings in the vicinity of 60 to 70 per cent.
However, the capital cost incurred by councils
bringing forward the batch replacements to adopt new
technology luminaires to cut the level of council
greenhouse gas emissions will be significant.
The past year has seen significant progress in
resolving the regulatory issues that constrain the
uptake and introduction of this technology. The
BUDGET 09-10
Essential Services Commission (ESC) has released its
draft determination on the fees for the retirement of
current MV assets and the installation of new, energy
efficient lamps under several payment scenarios.
The purchase and installation of efficient lanterns is
estimated to cost an average $250 per unit. With the
cost of stranded assets included, the current projected
costs range from $100 million to $270 million for full
change-over. The MAV believes that the State ought to
contribute 30 per cent of the costs to bring forward the
batch replacement over five years.
Page 5
Planning Reform
With the current economic crisis, the role of the
planning system in facilitating building developing is
extremely important.
Victoria has undertaken significant reform to its
planning system to simplify the process and has
succeeded in removing the need for most residential
development requiring permits. Further reforms ensure
the system can facilitate development to a great
extent.
Request
Creating Better Places
Contribution of 30 per cent of the estimated cost of
bulk batch replacement for energy efficient street
lights
The Victorian Government allocated $13.5 million over
four years to Creating Better Places (CBP) in the 2005
-06 State Budget. This program has enabled grants to
councils in support of Melbourne 2030 and place
making initiatives. The program is not funded beyond
2008-09 and the MAV seeks an extension or
replacement program to continue to provide valued
opportunities for the State Government to work in
partnership with councils and communities to create
more vital, attractive, sustainable and safe places.
Climate Change
Initiatives
The global financial crisis has not diminished the
importance of addressing climate change . The MAV
and member councils acknowledge that climate change
is not something that has appeared overnight and
cannot be resolved with quick fixes. As Professor Ross
Garnaut cautioned, it would be poor policy to delay long
-term structural change to cut greenhouse gas
emissions because of a short-term response to
economic upheaval. Instead, the global financial crisis
creates an opportunity for Victoria to consolidate its
foothold in green industries. These industries include
renewable energy, energy efficiency, sustainable water
systems, green buildings, biomaterials, and waste and
recycling.
Victorian local government is keen to work with the
State Government to create pathways for green
industry development, and to secure new industries in
Victoria, ahead of other potential locations. The MAV
calls on the State Government to increase financial
support and facilitate greater collaboration for
innovation and commercialisation of green industries,
products and services.
Request
E-Planning
In 2007 the Department of Planning and Community
Development (DPCD) and the Municipal Association of
Victoria (MAV) developed an e-planning strategy and
roadmap, supported by a MOU between the MAV,
DPCD and DSE. It is an industry-wide, strategic plan
to deliver a more efficient planning process.
Despite the State committing funds to many aspects
of the project, a lack of on-going funding support to
assist councils integrate information systems to
support compliance and improve efficiency in planning
processes is necessary to the success of the project
and should be redressed. This will improve the
efficiency of council planning system and facilitate
quicker application assessment.
As such, the MAV seeks a three to five year funding
commitment is needed to support councils systems
and cultural change processes to realise the full
benefits of this project.
Request
Funding for the continuation of Creating Better
Places program
Funding to assist councils implement
e-planning
Funding to support the development and
expansion of green industry
Contact Information
Municipal Association of Victoria
Level 12, 60 Collins Street, Melbourne 3000
GPO Box 4326, Melbourne