Warrnambool mayor Tony Herbert has called on the state government for help as it grapples with the loss of millions from its budget while being told it needs to keep on staff who were not entitled to the new Job Keeper payments.
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Cr Herbert said Local Government Minister Adam Somyurek put councils on notice on Tuesday about not standing down staff.
"Councils have a vital role to play supporting local communities during COVID-19, dismissing or standing down staff was not consistent with that," he said on Twitter.
"We are working with councils with a specific focus on small rurals to consider the implications of COVID19 on them." He said it was "fine for the minister to say that but they're not offering assistance".
"How on earth is local government expected to take all the financial hits when getting no assistance to do it?"
He said the state government had promised a $500 million Working for Victoria Fund but that was only for councils to employ new staff, not those who were redeployed.
The council was not eligible for the Federal Government's Job Keeper package.
The closure of council facilities such as AquaZone, the art gallery, Flagstaff Hill, Archie Graham Centre and library had so far put a $2.5 million hole in the budget.
Staff have been redeployed but the council has previously said if workers could not be redeployed they would receive five days of special leave, after which they were required to take annual leave or long service leave.
"If they have no personal leave available they will be stood down without pay," the council had said.
Cr Herbert said local government had long been the responsibility of the state governments but now the states wanted the federal government to help.
"The Federal Government has very little say over councils because that's the way the states want it, but now the states are saying 'what about the council staff?' and the feds are saying 'you want us to stay out of that area all the time and now you're calling on our help, you sort it out'," he said.
Cr Herbert said with state and federal governments collecting 97 per cent of all taxes, it was time they helped struggling councils.
With the $2.5 million hit to the council's budget only set to grow, calls for a complete waiver of council rates have been resisted.
Cr Herbert said calls for a waiver of rates for six months would cost the council as much $25 million in the long-term, and put it in such a precarious position it would probably never get out of. He said 24 people had so far applied for rate deferrals, and all of them had been granted.
Cr Herbert said the workload for council staff had increased significantly, such as home help staff who were required to meet extra stringent cleaning requirements for clients because of the COVID-19 pandemic.
"They are absolutely physically and mentally exhausted. They're concerned about their own health and the client's health that they're helping," he said.
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