'Money needs to come back': Bid to double return on Airbnb levy

It also wants the state government for the first time to chip in and fund regional airport upgrades.

Mayor Ben Blain will take up the causes at the next Municipal Association of Victoria state council meeting in May and get it to jump on board with the push.

Councillors this week voted to put forward two motions to the peak advocacy body.

They want the state government to guarantee at least 50 per cent of the funds raised by the 7.5 per cent short stay accommodation levy will be spent on providing housing in regional Victoria.

When the airbnb levy was announced last year, the state government said just 25 per cent of the revenue would go to regional Victoria.

But almost half of the 36,000 short stay accommodation properties were located in regional areas.

"They were saying they were going to give back 25 per cent to regional areas," Cr Blain said.

"If you're going to raise 50 per cent of the revenue in regional area well it needs to come back to regional areas, whether it is for services or housing.

"The money needs to be committed to come back. You can't be taking money out of regional areas. We are disadvantaged already.

"Do not increase the disadvantage."

Cr Blain said regional areas would be disproportionately affected with the way the plan was at the moment.

Cr Richard Ziegeler said spending 50 per cent of the revenue in regional areas was a simple calculation to make.

The council will also ask the MAV to back a motion calling for the state government to establish a funding program to improve infrastructure at airports in regional Victoria.

Previous estimates put the cost of an upgrade at more than $10 million.

"The problem at the moment is there is some federal funding but there isn't any state opportunities to fund regional airports," Cr Blain said.

"Especially for Warrnambool and the continuing growth of the city, there can't be an expectation that council funds 100 per cent of it or even dollar for dollar.

"We can't afford to do it."

Cr Blain said there needed to be a partnership between state and federal governments and the council.

"We need to have funding options available to us and across our state to increase state tourism and state services."

Hospitals, universities, TAFE and being able to bring in consultants - especially in areas that weren't readily available in Warrnambool as the city grew - were some of the sectors that would benefit from a bigger airport, he said.

With Warrnambool close to the Great Ocean Road and Budj Bim, a bigger airport in Warrnambool could also have tourism spin-offs for the region.

"There has been interest from airlines but we need to have a facility that can cater for the aeroplanes that can come in," Cr Blain said.

"If Warrnambool can have an airport that caters for an aeroplane up to a 737, in my view we'd be able to take any aeroplane from any regional airline in Australia.

"That would open Warrnambool right up."

Cr Max Taylor said a funding program to improve regional airports was vital because many country airports were under-serviced and not up to the required standard to operate commercial airline services despite there being a very strong interest in establishing more air services to country regions.

Cr Vicki Jellie said it would be good for Warrnambool to get the motions up at MAV because often things at the state meeting were city-centric.

"It will be good for Warrnambool to speak up," she said.