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Victoria Grants Commission Annual Report 1980

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Victoria Grants Commission Annual Report 1980 VICTORIA GRANTS COMMISSION ANNUAL REPORT 1980 1980 VICTORIA GRANTS COMMISSION ANNUAL REPORT 1980 Ordered by the Legislative Assembly to be printed By Authority: F. D. Atkinson, Government Printer No. 18 Melbourne VICTORIA GRANTS COMMISSION MEMBERS D. V. Moye B.Ec., H.D.A. (Hons), Chairman F. S. Bales F.I.M.A., J.P. S. L. Cooper J.P. SECRETARY F. M. Thomas B.Ec. (Hons). VICTORIA GRANTS COMMISSION ANNUAL REPORT 1980 The Hon. Digby Crozier, M.L.C., Minister for Local Government, 480 Coiiins Street, MELBOURNE. V/C. 3000. As Members appointed under section 3 of the Victoria Grants Commission Act 1976, we have the honour to present the fourth Annual Report of the Victoria Grants Commission, in accordance with section 17 of that Act. D. V. MOYE, Chairman F. S. BALES, Member S. L. COOPER, Member F. M. THOMAS Secretary October, 1980. TABLE OF CONTENTS INTRODUCTION . 9 CHAPTER I. THE YEAR'S ACTIVITIES ...................................................... 11 Inspections ..................................................................... 11 Annual Return of Information. : . ............................................... 11 Comparisons between Years. ........ 12 Conference of State Grants Commissions ...................................... 13 2. THE BASES OF THE DETERMINATIONS ...................................... 14 As-of-Right Entitlement ....................................................... 14 Equalisation ................................................................... IS Revenue Raising Needs ....................................................... 15 Expenditure Needs and Disabilities .......................................... 16 Standards. ...................... 17 Determining the Individual Allocations ......................................... 18 Acknowledgements . ............................................. 19 APPENDICES I Transmittal Memorandum and Determinations ................................... 20 11 Municipalities Inspected 1979-80 .................................................. 26 Ill Categories of Municipalities . ..................... 28 IV Formulae ............................................................ ', ....... 30 V Distribution of Rateable Property, Rate Income, Rating and Population 1975-76 to 1978-79 ....................................... 34 VI Tax Sharing Funds for Local Government Authorities 1974-75 to 1980-81 . .. .. .. .. 36 INTRODUCTION The primary role of the Commission is to determine the allocation between municipalities in Victoria of grants from the Commonwealth to the State for local government authorities under the provisions of the Commonwealth's Local Government (Personal Income Tax Sharing) Act 1976. The Victoria Grants Commission Act 1976 was proclaimed on 9 February 1977 and the Commission consisting of a full-time Chairman and two part-time Members, was formally constituted on 24 May 1977. By notification in the Commonwealth Gazette of 30 June 1978, the Victoria Grants Commission was formally declared the body to be the Local Government Grants Commission of the State of Victoria, in accordance with section 4 of the Local Government (Personal Income Tax Sharing) Act 1976. During the current year Mr. F. S. Bales and Mr. S. L. Cooper were re-appointed as Members of the Commission. The initial terms of office for the two Members expired on 24 May 1980, and the extended terms will expire in Mr. Bales' case on 31 October 1981, and in the case of Mr. Cooper on 31 October 1982. Section 12 of the Victoria Grants Commission Act 1976 requires the Commission, on or before 31 August each year, to determine the amount to be allocated to each municipality in that year. The Commission's determination for the 1980-81 financial year was transmitted to the Minister for Local Government on 29 August 1980. A copy of the transmittal memorandum and of the determination are included in Appendix 1 to this Report. Section 17 of the Act requires the Commission to report to the Minister by 30 November each year on the activities of the Commission during the preceding year ended 31 August. This Report is in compliance with that requirement. 9 Chapter 1 THE YEAR'S ACTIVITIES 1.1 The primary role of the Victoria Grants Commission is to determine, on or before 31 August each year, the allocation among municipalities in Victoria of general revenue grants from the Commonwealth to the State for local government authorities under the provisions of the Commonwealth's Local Government (Personal Income Tax Sharing) Act 1976 and under the Victoria Grants Commission Act 1976 which complements it. To assist the Commission in this role the Victoria Grants Commission Act provides that: "10 (l) Each municipality shall supply the prescribed information to the Commission­ ( a) on or before the day fixed by the Commission by notice published in the Government Gazette; or (b) in the case of a particular municipality, on or before such later date as is fixed by the Commission for that municipality. (2) Where a municipality has not complied with sub-section (1) the Commission shall nevertheless allocate to the municipality its 'As-of-Right Entitlement'.'' The Act also provides that "13 The Commission or any member thereof may carry out such inspection, conduct such hearings, take such evidence and generally make such investigations as the Commission thinks necessary for the purpose of properly carrying out its functions under this Act." In relation to proceedings before the Commission the Act stipulates that: "15 A municipality may be represented in proceedings before the Commission by Councillors or the municipal clerk or the municipal engineer or full-time officers or the municipality and not otherwise." 1.2 Provision is also made enabling the Minister for Local Government to "on his own motion or at the request of the Commission make written submissions to the Commission as to any factors which appear to the Minister to be of special significance in relation to all or any municipalities in the relevant financial year" (section 14). The Minister is required to publish notice of a submission in the Government Gazette, to lay copies of the submissions before both Houses of Parliament and make copies of it available to the public. 1.3 In addition, pursuant to section 16 of the Victoria Grants Commission Act 1976, the Commission is required to "enquire into and report upon any other matter relating to local government finances which is referred to it by the Minister". No such matter was referred to the Commission during the year ended 31 August 1980. 1.4 The Commission was formally convened on one hundred and thirty-six days during the year ended 31 August 1980 in order to undertake inspections and confer with Council representatives and to consider written submissions and other evidence relevant to the determination of allocations for the 1980-81 financial year. Inspections 1.5 During the year visits were made to 74 municipalities throughout the State; for the most part a full day was spent in each. This enabled the Commission to undertake a detailed inspection of each municipality and to set aside time for discussion with Councillors and their officers about the Commission's role and the municipality's submissions (see Appendix 11 for list of municipalities visited). This was the second year of a three-year programme of inspecting all municipalities in the State, which the Commission expects to complete during 1980-81. 1.6 The Commission has continued to develop the methodologies used in the analyses of the data which form the bases for determining each municipality's share of the funds, with a view to extending the use of objective measures and reducing the reliance on the judgment of its Members. In particular, various methods for measuring capacity to raise revenue, an important determinant of the allocations, are being examined with the aim of improving the equity of the allocations. However the work in this area was not sufficiently advanced for the results to be applied in a definitive way in determining the allocations for 1980-81. Annual Return of Information 1. 7 Central to the development of methodology is the availability of good quality data. As indicated in paragraph 1.1, section 10 of the Victoria Grants Commission Act 1976 authorises the Commission to require each municipality to provide prescribed information on or before a date fixed by the Commission. In conformity with that section, 3 December 1979 11 was the date fixed by notice in the Victoria Government Gazette No. 86 of 17 October 1979, as the date by which the prescribed information for the financial year ended 30 September 1979 should be returned to the Commission. 1.8 The Commission has continued to work closely with the Victorian office of the Australian Bureau of Statistics on the development of a joint return of statistical information to serve the needs of the Commission and the Bureau. The benefits of the joint returns in terms of time-savings and quality of data have accrued not only to the Commission and the Bureau but also to local government and other users. The publication in February 1980 by the Bureau of a new issue entitled "Local Government Finance Victoria (preliminary) 1977- 78" is the forerunner of a revised format which will make available to interested parties detailed and timely financial statistics for the 211 municipalities in the State. The publication contains details of functional income and expenditure by local government authority, derived from the joint return of information. 1.9 The importance to the Commission of
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