Local government association believes transport infrastructure will suffer due to changes to federal financial assistance grants
The freezing of federal financial assistance grants will lead to crumbling roads that will further impact the transport industry, the Municipal Association of Victoria (MAV) says.
MAV President Bill McArthur says councils will not be able to absorb the costs of the changes and that infrastructure may suffer as a result.
Rural and regional areas in Victoria will be hardest hit as 85 per cent of the road network is managed by the local government, he adds.
“Councils are now faced with the dilemma whether they will cut services, cut out infrastructure improvements or how they manage their affairs going forward,” McArthur says.
“It’s really a catastrophic impact for the rural councils in particular. They don’t have other streams of revenue where they can prop-up the budget.
“I know my own council, which is Golden Plains Shire, is running at 36 employees less than the state average.”
McArthur says the transport industry will be hardest hit.
“We certainly manage the first and last mile of the major transport routes and I imagine it will have a significant impact.
“There is pressure on the councils to maintain that infrastructure spend and in the current climate with these cuts that’s going to be even more difficult.”
The changes to the grants were detailed in the federal budget handed down earlier this month.
The Federal Government decided to halt the indexation of the grants, which are designed to fund community services and local infrastructure.