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Rural councils and the prosperity of rural Victoria

  • Year: 2006
  • Author: Manning, Ian
  • Journal Name: National Economic Review
  • Journal Number: 60
  • Country: Australia
  • State/Region: Victoria

This report is part of the Municipal Association of Victoria (MAV) response to an MAV State Council motion requesting the MAV to lobby the State Government to prepare a Rural 2030 strategy, and a request by the Rural Councils Network for the MAV to take up the financial sustainability issues of small rural councils with other tiers of Government.

The MAV has examined the financial sustainability of Local Government in Victoria and has developed some indicators that highlight whether or not there are financial constraints being experienced by councils. While the general financial position of councils has improved over the past ten years, a number of councils have regressed and now appear to be at significant risk. These councils tend to be rural, without a large population centre, have declining population and rely on a narrow industry base. The MAV believes that councils exhibiting a number of characteristics - operating deficits, high levels of gearing, substantial infrastructure gap and high rating effort - are at significant financial risk.

This report complements this financial analysis with an examination of the broader issues facing rural communities in Local Government areas characterised by small populations (under 20,000 people) and no dominant urban centre. The National Institute of Economic and Industry Research (NIEIR) was commissioned to analyse why these areas are being left behind relative to Victoria's urban areas, and to identify what is needed for Victoria's rural areas to continue and grow their important economic contribution for the benefit of the whole State.

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