Knox pleased with cost deal

– Ed Merrison
KNOX City Council has welcomed the signing of a new intergovernmental agreement (IGA) which promises to tackle cost shifting and provide what it says is fairer funding arrangements to local government.
However, the council’s praise was tempered by the agreement’s failure to ease existing financial and resource pressures arising from the transferral of services from Federal and State Governments to local government, known as cost shifting.
Council CEO Graeme Emonson said that while the agreement was welcome it was unlikely to have an impact on the council in the immediate future.
“It is pleasing that the agreement recognises that cost shifting from other spheres of government has a major impact on local government’s capacity to provide services to the community but disappointing that past cost shifting will remain unresolved,” he said.
Mr Emonson said the council provided a wide range of services that were partly funded by State or Federal Government grants but that in the vast majority of cases, annual operating grants did not increase at the same rate as the cost of providing those services.
“Council’s percentage contribution of the total cost of service provision, therefore, continues to escalate.
“These services include school crossing supervisors, maternal and child health services, library services, Meals on Wheels and family day care,” he said.
The IGA, signed on Wednesday, 12 April, establishes a framework to improve the way in which local government matters are dealt with by the two higher levels of government.
The signing of the agreement, which applies only to future services, was heralded by the Municipal Association of Victoria as a first step towards fairer local government funding.
MAV president Geoff Lake said the IGA provided mechanisms to ensure better funding arrangements and clarification of responsibilities preceded the transferral of services.
“The IGA is of critical importance to the sector as it takes account of the need for appropriate delivery standards and funding arrangements to be negotiated, not imposed without consideration of the financial and resource implications.
“As a result of the commitment shown by the Commonwealth and Victorian Governments, the MAV expects all future negotiations on services and functions that are agreed and transferred to local governments won’t leave councils short-changed and out of pocket,” he said.
However, Cr Lake shared Mr Emonson’s reservations regarding the limited scope of the IGA, saying there were still many instances where councils continued to grapple with financial and resource pressures as a result of transferred responsibilities.
“While outstanding issues such as prior instances of cost shifting and fairer funding arrangements for councils are still to be addressed, (this) is a milestone for local government and a significant positive shift in the relationship between the three spheres of government,” he said.