Rural People, Rural Services

Financial Sustainability

• A financially sustainable council is capable of:– Providing required services and facilities– Raising revenue sufficient to finance these– Maintaining operational viability

• For a Shire to be financially sustainable:– Residents must have the capacity to pay– Costs need to be covered– Assets need to be maintained

Minimum Services

• Rural people require a minimum suite of basic services

• Without these services, communities become more and more unliveable

• If communities become unliveable, people will leave and agricultural and other industries will become disassociated from their communities with workers flying in and out

Buloke Shire’s Experience

• Buloke Shire has always struggled to be financially sustainable with this compounded by natural disaster.

• The Shire’s capacity to pay for its services has been further stretched with a series of dry seasons.

• Over the past 18 months we have reduced costs by $4.2mill and staff by 23 EFT. Buloke’s actions have been witnessed, audited and verified.

• We are now in a stable position and are sustainable over the medium term

• Despite all this, Buloke cannot provide a reasonable suite of minimum services to its residents

Buloke Shire’s Experience (ctd)

• The reasons for these problems becoming evident in small rural shires is clear, they originate from barriers such as:– Lack of economies of scale– Large distances and time required to deliver services.– More people with lower incomes and other socio-economic factors.– A higher proportion of aged people in the population.– Lack of competition from service providers and suppliers.– Difficulties in the recruitment of staff and skilled contractors.– Lack of competition for goods and services with market failure

resulting in premiums being paid.– Small population sizes and a consequent lack of capacity to pay for

services.

RURAL LIVING

• In order to address this problem it is first necessary to affirm that all Victorians should be able to access a minimum set of local government service levels

• Once we have agreement to this then the structural problems that create inequities can be addressed

• The RURAL LIVING campaign is about equity, opportunity and raising community awareness

RURAL LIVING (ctd)

• Small rural shires have made a great deal of progress with improving operations, sharing services, innovation and high levels of efficiency.

• Despite this they cannot provide an adequate level of services and remain financially sustainable.

• Local government is a partnership with state and federal governments to “improve the overall quality of live in the municipal district” (LGAct).

• This responsibility is not being met by the partners under the current fiscal arrangments.

RURAL LIVING (3)

• RURAL LIVING does not suggest changes or solutions

• RURAL LIVING seeks agreement to the concept that all Victorians, including the residents of small rural shires, are worthy of a specific minimum set of service levels.

• Only when we get agreement on this by all parties can methods of achieving a positive outcome be discussed.

RURAL LIVING CampaignThe campaign includes:• a working group of interested Councils,• a facebook page, with logo, • local working groups of interested residents• a month-by-month facebook strategy for May – September including stories, • media releases at key points in the campaign co-ordinated with radio and

newspapers starting in May, • feature articles • letters to Victorian Government departments.• invitations to local members of Parliament to Council briefing sessions over the

2015 calendar year.• an advocacy group to take the issue to the Commonwealth Government.• a delegation to meet with the Victorian Minister for Local Government in

Melbourne in August 2015.• a delegation to meet with the Commonwealth Minister for Local Government in

Canberra in September.

Verification

The Whelan Report (2013) provides research background to the phenomena we are currently experiencing.– capacity to pay for Small Rural Shires is 70% of the State

median (58% in the case of Buloke Shire)– nominal costs for Small Rural Shires are 81% higher than

the State Median (141% in the case of Buloke Shire)– Even taking into account the higher grant funding

received by small rural shires, their sustainability is only 47% of the State Median (26% of the state median for Buloke Shire)