Budget put off balance by virus


ALTHOUGH caught in the midst of unprecedented economic uncertainty, Mornington Peninsula Shire has released its proposed 2020/21 budget for public comment.

Property rates will rise by 2 per cent, in line with a cap imposed by the state government, providing the shire with $191.6 million towards an overall predicted  income of $244.9m, $8m less than the previous year. Rural living rates will drop by 6 per cent.

The budget does not include any of the ongoing and extensive measures being taken by the shire to help prevent the spread of COVID-19 (“Crisis backing for business” The News 31/3/20).

The ultimate involvement by the shire is unknown and the state Opposition has called on councils to offer rate relief “to distressed households right now”.

“Councils must also give thought to a complete rate freeze for this financial year, to assist everyone with this significant cost burden,” local government spokesperson Tim Smith said.

“But the state government must help councils with any loss of revenue so that the important role of councils can continue uninterrupted during these unprecedented times.”

Mr Smith said municipalities were responding to COVID-19 pandemic “through emergency management provision”.

“With many businesses reducing in size or going into hibernation, and employees and sole traders transitioning to the federal government’s JobKeeper or JobSeeker programs, the burden of councils’ rates on ratepayers will become increasingly onerous for many Victorians.

“One of the most important initiatives the state government could make to support vulnerable Victorian households would be to fund rate relief.”

Cr Hugh Fraser has already warned of how dealing with the pandemic is likely to hit the shire’s bottom line (“Free food plan as virus hits home” The News 23/3/20).

He said it was reasonable to expect state and federal governments to slow their payment of grants and to expect rates to go follow a similar pattern, both affecting cash flows.

These negative impacts on the shire’s finances could mean that had to borrow money to meet demand for “our home and community service delivery”.

Cr Fraser said the COVID-19 emergency could lead to a significant downturn in economic activity “over perhaps 18 months”.

Submissions on the proposed 2020/21 budget close 23 April and will be considered at council’s 6 May meeting. The proposed budget can be viewed at www.mornpen.vic.gov.au (search for proposed budget 2020/21).

First published in the Southern Peninsula News – 7 April 2020


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