A political bunfight has erupted over a Victorian Auditor General’s report that found south-west councils were at low risk of being financial unsustainable.
The state government said the report was predominantly positive for Victorian local government but there were emerging issues for 19 small shire councils with the federal government freeze on indexation of federal grants to those councils hitting them hard.
No south-west councils were classed as small shire councils that had populations less than 16,000 people.
But Member for Western Victoria Simon Ramsay said the state government had ignored the destructive impact that rate capping and the loss of Country Roads and Bridges Program was having on regional and rural councils.
“The Andrews Government’s cuts to road and bridge funding in regional Victoria are an absolute disgrace and have caused immense harm to our road networks,” Mr Ramsay said. He said the state government’s comments were “a cheap political swipe at the federal coalition government.”
The report found Warrnambool City Council would generate surpluses over the next three years but internal financing could be an issue this year when it might not be generating enough cash from operating to fund new assets.
It also indicated the council’s planned spending on capital renewal from from 2017-2019 might be insufficient.
Corangamite, Moyne, Southern Grampians and Glenelg councils were all expected to generate surpluses but the report had concerns about Glenelg council’s liquidity and indebtedness over the next three years.
It also had concerns about Glenelg’s internal financing this financial year and the council’s indebtedness over the next three financial years.
The report also said the ability to replace capital could be a problem for Moyne over the next three years, for Corangamite this financial year and 2018-2019 and for Glenelg and Southern Grampians in 2017-2019.