The Municipal Association of Victoria has preducited that council costs will need to rise an estimated 3.9 per cent to deliver the same level and range of community services and infrastructure as last year.

 

The Local Government Cost Index is released each year and is equivalent to the consumer price index forecasting.

 

Cr Bill McArthur, MAV President said council expenses were primarily driven by construction, materials and wages, rather than the Consumer Price Index (CPI) which measures changes in household expenses.

 

“For councils to maintain $60 billion in community assets and provide more than 100 services requires both front-line workers and construction materials. These are the main cost drivers for local government.

 

“From child carers, engineers, road workers, nurses, planners, parks and gardens staff to life guards, school crossing supervisors, food safety inspectors and home care staff. Local government does it all.

 

The Local Government Cost Index is calculated using published industry and Government construction and wage indices that best represent the mix of council spending profiles. This year the Cost Index also includes estimated increases in municipal construction, electricity, gas and landfill costs associated with the introduction of the carbon price on 1 July.

 

Cr McArthur said the 3.9 per cent forecast rise in costs was a sector-wide average that would differ for individual councils depending on factors such as population growth, actions to reduce their exposure to the carbon price, Government funding received, and the impacts of other cost pressures,” Cr MacArthur said.

 

“Government funding for joint community programs continues to be lower than actual council costs to deliver these services, and other cost pressures will also affect council budgets for the coming year.

 

“Many municipalities are struggling with growing waste management costs due to stricter State regulations for landfills, plus steep annual rises in State landfill levies. This year landfill levies that councils must collect and pass on to the Government will be in the order of $49 million or $20 per household.

 

The full index is available here

http://www.mav.asn.au/about-local-government/local-government-finance/Related%20documents%20%20cost%20index/2012%20cost%20index%20report.docx