The possible fallout from the federal budget continues to leave Bega Valley Shire Council in limbo and unable to finalise its own budgets particularly in respect of pensioner rebates for rates, water, sewer and water.
In response to a question at the council meeting on Wednesday, May 28, from councillor Keith Hughes who asked whether council had any information about the impact of the federal budget on council’s own budget, the general manager, Leanne Barnes warned that there could be ramifications.
Ms Barnes said: “We are still evaluating it. There will be impacts from the state budget too and there may need to be movements in council’s own budget.”
One of the areas of uncertainty is the pensioner rebate on rates given to people holding a pensioner concession card.
Council’s finance manager, Lucas Scarpin told the News Weekly: “Council currently has 3,685 full pension claim properties on its rates register. Each of these properties receives a rate rebate of $425 per annum split across rates, water, sewer, and waste. Currently the state government reimburse council 55 per cent of the pension claim with council absorbing the remaining 45 per cent.
“The federal budget indicates a change to the level of support provided to the state government for pension concession. At this time the state government has not indicated if any changes will be made by the state to local government in the value or structure of the pension claim into the future. Any changes made to the structure or value of the pension claim would need to be considered by council in relation to budgetary impacts,” Mr Scarpin said.
The state government currently contributes in the region of $860,000 to council for these concessions.
There are also concerns about the impact of a freeze on the Financial Assistance Grants (FAGs) that council receive from the federal government.
Council would normally expect to see an increase in the FAG in line with CPI which is currently running at about 2.5 per cent. However if the federal budget is adopted it will leave the FAG at the current value. This could mean a shortfall in expected grant revenue of about $170,000 this year but a compounding shortfall over the next couple of years.
At a Senate Budget Estimates committee hearing last week the Secretary of the Department of Infrastructure and Regional Development, Mike Mrdak, conceded that the decision would place new pressure on councils.
“I imagine in light of the Budget that local government - each individual council - will be looking to see how they need to reshape their budget in terms of no longer having access to that indexation factor,” he said.
Council is waiting to see which parts, if not all, of the federal budget are approved. There is also the matter of the state budget. Member for Bega Andrew Constance, as the new state Treasurer sits between those with their hands firmly in their pockets and those with their hands out.
The state budget will be delivered on Tuesday, June 17.