VICTORIA GRANTS COMMISSION ANNUAL REPORT 1984

Annual Report

of the

VICTORIA GRANTS COMMISSION

for the

Year ended 31 August 1984

Ordered by the Legislative Assembly to be printed

MELBOURNE F D ATKINSON GOVERNMENT PRINTER

...... 1985

No. 13 VICTORIA GRANTS COMMISSION ANNUAL REPORT 1984

The Hon. F. N. Wilkes. MP., Minister {or Local Govemmen( 480 Colfins Stree( VIC 3000. As Members appointed under section 3 of the Victoria Grants Commission Act 1976, we have the honour to present the eighth Annual Report of the Victoria Grants Commission, in accordance with section 17 of that Act

D. V. MOYE, Chairman

L F. CHEFFERS, Member

J. M. WALTON, Member W.A Phillips Secretary

November, 1984

VICTORIA GRANTS COMMISSION

MEMBERS

D V Moye, B.Ec., H.D.A (Hons), Chairman L. F. Cheffers, L.G.E., M.I.E.Aust, F.I.M.A., M.B.S. The Hon. J. M. Walton

SECRETARY W. A. Phillips, B.Bus, B.Sc (Hons), Grad. Dipl. D.P., Ph.D.

TABLE OF CONTENTS Page No. INTRODUCTION ...... vii CHAPTER 1. THE YEAR'S ACTIVITIES I Inspections ...... 1 Annual Return of Information ...... 2 Submissions ...... 3 Comparisons between Years ...... 3 Conference of State Grants Commissions ...... 5 Committee of Inquiry into Local Government Finance ...... 5 Federal Government Policies ...... 6 Computer Facilities ...... 6 2. THE BASES OF THE DETERMINATIONS ...... 7 As-of-Right Entitlement ...... 8 Equalistion ...... 8 Revenue Raising Needs ...... 9 Expenditure Needs and Disabilities ...... 11 Determining the Individual Allocations ...... 15 Natural Disasters ...... 16 Acknowledgements ...... 16 APPENDICES I Transmittal Memorandum and Determinations ...... 17 11 Municipalities Inspected ...... 25 Ill Categories of Municipalities ...... 26 IV Formulae ...... 28 V Distribution of Rateable Property, Rate Income, Rating and Population 1975-76 to 1982-83 ...... 33 VI Tax Sharing Funds for Local Government Authorities 1974-75 to 1984-85 ...... 35

V

INTRODUCTION The primary role of the Commission is to determine the allocation to municipalities in Victoria of grants from the Commonwealth to the State for local government authorities under the provisions of the Commonwealth's Local Govemment(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. Section 12 of the Victoria Grants Commission Act 1976 requires the Commission, on or before 31 August each year, to determine the amount of general revenue grants to be allocated to each municipality in that year. The Commission's determination for the 1984-85 financial year was transmitted to the Minister for Local Government on 31 August 1984. A copy of the transmittal memorandum and of the Determination are included in Appendix I 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 31st August This Report is in compliance with that requirement

Vll

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 to municipalities in Victoria ofgeneral 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) m the case of a particular municipality on or before such later date as is fLXed by the Commission for that municipality. (2) Where a municipality has not complied with sub-section (I) 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 carrv out such inspections, 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 of the municipality and not otherwise." 1.2 The Act also provides that the Minister for Local Government may "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 signficance in relation to all or any municipalities in the relevant financial year" (section 14). In so doing, the Minister is required to publish notice of a submission in the Government Gazette. to lay copies of the submission before both Houses of Parliament and make copies available to the public. No submission has been made under this provision to date. 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 1984, nor in any previous year. 1.4 The Commission was convened on eighty-four days during the year ended 31 August 1984 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 1984-85 financial year.

INSPECTIONS 1.5 Inspections were taken of forty-four municipalities throughout the State during 1983-84; this completed the third round of a five-year programme of inspecting each municipality. 1.6 The aim of the inspections is to cover the range of services being provided by the respective Councils, in order that the Commission might better appreciate the conditions which each Council faces in serving its community. A period is set aside at the end of each inspection for discussion with Councillors and their officers about the role of the Commission and about aspects of municipal functions which are relevant to that role. 1.7 These inspections and discussions have been invaluable to the Commission because of the benefit of a more comprehensive knowledge of the physical characteristics of each municipality and a greater appreciation of the social and environmental aspects of the respective areas which have influenced Councils' expenditure policies. This is important in distinguishing between costs which are related to needs and disabilities and costs which reflect Councils' policy decisions. 1.8 The flexibility available in inspection programming as a result of the shift to a five-year framework has enabled the Commission to devote more time to areas where special circumstances prevail Examples of this are the visit to the Portland area in 1981-82 to assess the impact of the Alcoa project on the Portland Town and Portland Shire Councils and the visit to the Bright and Mansfield Shires in 1983 to assess the impact of the major snow resort areas on the activities of the two Councils. In addition, the Commission has been able to pro~ram its inspections to include visits to areas that experience heavy pressure on facilities due to the influx of visitors during the summer holiday period. Several municipalities adjoining the and Bay were inspected during January-February 1984.

ANNUAL RETURN OF INFORMATION 1.9 As indicated in paragraph 1.1, section 10 of the Victoria Grants Commission Act 1976 authonses the Commission to require each municipality to provide prescribed information on or before a date fixed by the Commission. In conformity with that section, 5 December 1983 was the date fixed by notice in the Victoria Government Gazette No. 100 of 5 October 1983, as the date by which the prescribed information for the financial year ended 30 September 1983 should be returned to the Commission. 1.10 The Commission has worked closely with the Victorian office of the Australian Bureau of Statistics on the continuing development of the joint Return of statistical and other information which serves the needs of the Commission and the Bureau. The Return has been devised to conform with the standardised form of recording local government financial statistics and with the new regulations for local ~overnment accounting for all municipalities in respect of the 1982-83 munictpal year, which is also aligned to the standardised format The statistics derived from the Annual Returns are published by the Australian Bureau of Statistics in its Bulletin ''Local Government Finance - Victoria" (Catalogue No. 5501.2), which provides detailed information on local government income and expenditure for each municipality, over a wide range of functional headings. 1.11 The Commission is encouraged by the marked improvement in data presentation that is evident following the adoption, by all municipalities, of the revised format for the annual statement of accounts for the 1982-83 municipal year. There are, however, several aspects of the new accounting requirements that have yet to be resolved. The most important one, from the point of view of comparative statistics, is the treatment of oncost and overheads. Until a uniform approach to the allocation of oncost and overheads is adopted, including uniform rates to apply to the respective functions, compilation of comparative statistics will continue to be a difficult task To this end, it will be necessary to continue to seek in the Return information about the treatment of oncost for all functions, so that adjustments can be made to the data where the rates used differ from those most commonly used. 1.12 The Commission has previously referred to the benefit that can accrue from reducing delays in the processing of information which is essential to the allocation process. The date of payment of the grants is largely determined by the

2 date by which the allocations are finalised, once the total for the State is known. With the amount of money now involved, there should be an obvious financial incentive for all Councils to ensure that their staff are not responsible for any undue delays to the Commission's work which might hinder the early completion of the determination. 1.13 As in previous years the majority of municipalities lodged their Returns on or about the due date, but a number again failed to do so without reasonable excuse. In some instances repeated efforts by the Commission's staff to have the required information provided within a reasonable time or in a satisfactory manner were ignored. The Commission takes no responsibility for deficiencies in allocations for these municipalities which may have resulted from failure on their part to co-operate in the provision of essential information. 1.14 The Commission was disappointed in the very late provision of data by the Australian Bureau of Statistics for the 1982-83 financial year and the unsatisfactory nature of some aspects of it. The deficiencies in the Part A data tape seriously compromised the work of the Commission in determining the allocations and the late arrival delayed the completion of the determination by several weeks. SUBMISSIONS 1.15 The Commission has not required Councils to make formal submissions each year. It has copies of detailed submissions made to the Commonwealth Grants Commission prior to 1977 and summaries of the salient points made in these submissions. In most cases annual submissions would simply be repeating points made in previous years and therefore would serve little purpose. However, the Commission encourages Councils to make submissions where they believe there have been material changes to circumstances within the municipality or where some aspect of the municipality's functions may have been overlooked in previous submissions. Also, as part of the presentation of itineraries, the Commission requires detailed summaries of significant features of the respective municipalities, particularly those in areas being inspected during the visit This provides a further opportunity to update information on various aspects of each municipality. COMPARISONS BETWEEN YEARS 1.16 The continued upgrading of financial data and other information about the 211 municipalities has assisted in the development of more precise statistical measurements of fiscal need, which underlie the allocations. However, it is difficult to devise methodolo~ that can satisfactorily cope with all of the different aspects of the 211 municipalities at the one time. The determinations therefore reflect not only statistical measurements of fiscal need but also the Commission's judgment of these measurements against the background of the considerable knowledge of local government that it has accumulated. Consequently, as improvements are made to the methodology and its application to the data, and the Commission's knowledge and understanding of the circumstances of each municipality is extended, adjustments will be effected to the assessments of the relative fiscal needs and disabilities of individual municipalities which will be reflected in rates of increase in allocations for some municipalities that may differ significantly from the overall rate of increase for the State as a whole. For this reason, no necessary conclusions should be drawn about the allocation to a municipality for any year from the allocations determined for prior years. 1.17 In addition, as has been repeatedly emphasised by the Commission, the volatile nature of some of the elements upon which the allocations are based further complicates any comparison of allocations between years. The legislation prescribes two principal elements that have to be considered in the allocation process- capacity to raise revenue and relative costs of services. A number of the component parts of each of these elements are subject to significant shifts between years.

3 1.18 Capacity to raise revenue is a reflection of the relative value of rateable property in each municipality. As indicated in the Valuer-General's Reports covering the 1980 to 1983 calendar years, there have been significant shifts in relative property values during the period under review. These shifts in values are reflected in shifts in capacity to raise revenue and for areas where the greatest percentage increases have been recorded, this has resulted in lower levels of increase in the allocations for the coming year. The areas most affected by these movements are the bayside and inner eastern metropolitan areas; irrigated farmland and wheat-growing areas also maintained the htgh values established in previous years. 1.19 Capacity to raise revenue is also affected by development and the extent to which this will affect allocations depends upon the strength of its effect upon the overall values of property within the municipality and upon the extent of offsetting increases in expenditure needs. Substantial increases in valuations without commensurate increases in expenditure needs is a significant factor in allocations varying between years. 1.20 On the expenditure side, road construction and reconstruction works may be strongly influenced by factors such as terrain, land acquisition, relocation of services, earthworks, drainage and erosion control measures and the like. The amount and nature of works undertaken in any year can have significant effects on allowances for road construction and reconstruction which will be reflected in the allocations for that year. Clearly, high costs applicable to projects in one year, which will influence the size of allocations to the relevant municipalities in that year. cannot influence the size of allocations for another year when the works undertaken may have quite different unit cost characteristics. (Similar con­ siderations apply to the construction or reconstruction of drains.) Also, allowances for the costs associated with high rates of population growth are phased out as growth tapers off. The removal of such allowances, other things being equal, will mean that allocations for the relevant municipalities increase at a lower rate relative to the increase for the State as a whole. 1.21 For less populous municipalities in the State where roadworks are the dominant activity, there are many instances where expenditure on roadworks 0 exceeds general administration expenditure by a significant margin. > In these situations allowances for roadworks will dominate allowances in the expenditure component of the allocations and thus will have a significant effect on the level of allocations for individual municipalities. Where there are disparities in cost conditions for roadworks within a municipality and these are reflected in differences in unit costs of components in road construction and reconstruction projects from year to year, there will be concomitant variations to the allocations from year to year. These variations are likely to be $reater, the greater the emphasis is on roads expenditure in the municipality's acttvities. 1.22 The small increase of less than six percent in funding for the 1984-85 allocations was insufficient to fully absorb shifts in relative revenue-raising capacity and/or relative costs of services. This resulted in allocations for 1984-85 for nineteen municipilaties which are less than allocations for 1983-84. There are also a number of allocations which are not significantly greater than those for the previous year. 1.23 It is apparent that some of the criticism of the allocations arises from a -continued lac·k of understanding of the Commission's role and the principles and methods used in determining the allocations. These are outlined in Chapter 2 of this Report and the basic formulae are reproduced in Appendix IV. It is important that local government officers appreciate the significance of this information and that Councillors who will be involved in discussions with the Commission are familiar with the principles and methods underlying the allocations.

(I) See, for example, Table 6 "Ordinary Services; Current Outlay" in "Local Government Finance, Victoria 1981-1982", Australian Bureau of Statistics, Victorian Office; Catalogue Number 5501.2.

4 1.24 In some instances Councils have failed to take into account allowances for special factors which are listed in the Attachment to the Determination, copies of which have been circulated to every municipality, when calculating percentage increases from year to year. As pointed out in the Attachment, special factors allowances, which mainly relate to natural disaster expenditures, apply to the year in question only. Therefore in making comparisons of allocations between municipalities, or of individual municipalities, from year to year, the amounts shown in the schedule of the Attachment, should first be deducted from the total allocations for the relevant municipalities. 1.25 It should be appreciated that the allocations for any given year are based on the characteristics of a municipality that existed two years previously (for example, the 1984-85 allocations are based on data relevant to the 1982-83 municipal year). Consequently, any alterations in the characteristics of a municipality e.g. as a result of boundary changes, should not have an effect on the size of the allocation until two years later. 1.26 It should also be appreciated that with the limitation on the overall allocation of funds for general revenue grants, the allocations can reflect only a partial recognition of the needs and disabilities of individual local government authorities throughout the State.

OTHER MATIERS CONFERENCE OF STATE GRANTS COMMISSIONS 1.27 Representatives of the Grants Commissions of the six States and the Northern Territory met in Melbourne on 15-16 September 1983 for discussions on aspects of the various approaches to the distribution of general revenue grants being followed in each of the States and the procedures followed by the respective State Commissions. These conferences are held annually in each State on a rotational basis. (The 1984 Conference was held in Perth, Western on 27- 28 September 1984). A technical working party, comprising supporting staff from the respective State Commissions, also meets in conjunction with the Conference to exchange information and ideas related to the development and practical application of fiscal equalisation methodologies. 1.28 The 1983 Conference was opened by the Hon. Frank Wilkes, M.L.A., Minister for Local Government and was later addressed by the Hon. Tom Uren, M.P., Minister for Territories and Local Government in the Federal Government and the Minister responsible for the administration of the legislation relating to local government revenue sharing. A senior officer from the Department of Territories and Local Government participated in the Officers' Workshop and the proceedings of the Conference.

COMMITIEE OF INQUIRY INTO LOCAL GOVERNMENT FINANCE 1.29 The Minister for Territories and Local Government, the Hon. Tom Uren, M.P., announced, on 10 May 1984, the establishment of a Committee of Inquiry into Local Government Finance. Under its terms of reference, the Committee is to review the local government tax sharing arrangements and report on any changes required to improve the operation of the Local Govemment(Personal Income Tax Sharing) Act 1976, with reference to: • the respective roles of the Commonwealth and the States in regard to local government; • the purpose and functions of local government revenue sharing; and • the level and form of funding for local government available from Commonwealth, State and local government sources and the principles which should determine the level and allocation of the local government revenue sharing funds between and within States.

5 1.30 The review is a most important one for local government and is expected to take about a year; the Commonwealth has undertaken to consult with the States before determining any chan~es to the local government tax sharing arrangements. The Victoria Grants Comm1ssion is actively involved in the preparation of the State's submission to the Inquiry.

FEDERAL GOVERNMENT POLICIES 1.31 In the 1984 Federal Budget documents, the Government indicated that "the amount of general purpose assistance for local government in 1984-85 will be no less in real terms than in 1983-84. In practice, this will mean that the increase in the grant in 1984-85 will be no less than the increase in the average level of the Consumer Price Index between 1983-84 and 1984-85." As indicated by the Minister for Territories and Local Government in a summary of budget matters relevant to local government, the overall increase of 5.92 percent in the 1984-85 allocations compared with the preceding year exceeds the projected increase in the Consumer Price Index for 1984-85 of about 5.25 percent. COMPUTER FACILITIES 1.32 The Commission has obtained funding from the Department of Management and Budget for the installation and continuing operation of a UNIX based multi-user microcomputer system. It is expected that the system will be operational by the end of the 1984 calendar year and will facilitate processing ofthe data for the 1985-86 and subsequent determinations. It will futhermore greatly enhance the ability of the Commission to undertake detailed research into fiscal equalisation methodology and provide the basis for a much-needed information system for the Local Government Department generally. The necessity for such a facility was highlighted by the delays m receiving output data from the Australian Bureau of Statistics referred to in paragraph 1.14

6 Chapter 2 THE BASES OF THE DETERMINATIONS 2.1 The Commonwealth Local Government (Persona/Income Tax Sharing) Act 1976 provides for the payment to the States, for allocation to local government authorities, of an amount determined by the total personal income tax collections for the financial year immediately prior to the year to which the payments apply. In 1976-77 payments totalling $140 million were made to the States for allocation to municipalities. This was equivalent to 1.52 per cent of the personal income tax collected during 1975-76 and the same proportion was used to determine the total allocations for 1977-78 and 1978-79. In 1979-80 a total of$221.7 million was made available to the States. This reflected an increase to 1.75 per cent in local government's share of personal income tax revenue for allocation to municipal councils. The share was further increased to 2 per cent, effective from the 1980-81 allocations, fulfilling an undertaking given in 1977 to raise local government's share of personal income tax revenue to this level during the life of the Parliament The same proportion has been used to determine the total available for allocation in subsequent years. 2.2 The total amount available to the six States for allocation to local government authorities in 1984-85 was $486,533,887, an increase of 5.92 per cent over the amount for 1983-84. The apportionment to the six States is set out in the Commonwealth Act and is based on recommendations by the Commonwealth Grants Commission (see Commonwealth Grants Commission Special Report 1977 on Financial Assistance for Local Government). The relative State percentages and the amounts for 1984-85 are shown below: Percentage Amount($) New South Wales 36.4977 177,573,678 Victoria 25.4513 123,829,199 Queensland 16.8606 82,032,533 South Australia 8.6010 41,846,780 Western Australia 9.3897 45,684,072 Tasmania 3.1997 15,567,625 100.0000 486,533,887

2.3 The total of general revenue funds made available by the Commonwealth for allocation to local government since the first revenue grants were made in 1974- 75 is $2,864 m.; of this total amount Victoria has received $729 m. (see Appendix VI for further details). 2.4 The Commonwealth Act stipulates that two basic conditions be observed: (i) not less than 30 per cent of the total amount for a State for a year shall be allocated on a population basis which may also take into account size, population densities and other agreed matters; and (ii) the remainder of the amount shall be allocated on a general equalisation basis to ensure, as far as practicable, that each local government authority is able to function, by reasonable effort, at a standard not appreciably below the standards of other local government authorities in the State, takin~ into account differences in the capacities of local authorities to ra1se revenue and differences in the cost of performing local government functions. 2.5 The above requirements are embodied in section 12 of the Victoria Grants Commission Act 1976 which provides that each municipality in the State shall receive an entitlement "as-of-right" in accordance with (i) above and that no

7 municipality shall receive an amount that is less than its As-of-Right entitlement Further, section 12(3) of the Act requires the Commission to consider: "(a) the special needs and disabilities of the particular municipality; (b) the effort made by the municipality to function effectively and provide reasonable services; and (c) any other matters which in the opinion of the Commission, are of special significance in relation to the municipality."

AS-OF-RIGHT ENTITLEMENT 2.6 For the 1976-77 allocations the Interim State Grants Committee, following extensive research by the Working Party on Local Government Finance, recommended that the As-of-Right component be 40 per cent of the State's total allocation and that each municipality's entitlement be determined on the basis of: Population 85 per cent Area 15 per cent The same basis has been used for determining the As-of-Right entitlement for all allocations since that time. For the 1984-85 allocations the population and area figures used were taken from the publication of the Australian Bureau of Statistics, "Estimated Resident Population in Local Government Areas, Victoria, 30 June 1981, 1982 and Preliminary 1983" (Catalogue Number 3203.2.) 2.7 The As-of-Right entitlement factors for the 1984-85 allocations are: Population $10.435347 per head Area $32.715677 per square kilometre The allocations for two municipalities, the Shires ofRosedale and Walpeup. were determined by reference to their entitlements As-of-Right. 2.8 The As-of-Right entitlement is a means of ensuring that each municipality receives a minimum grant The basis upon which it is calculated ensures that some recognition is given to population and area effects on the relative costs of local government services, particularly for any municipality that may not qualify for a laq~er allocation. However, a common misunderstanding is that the As-of-Right entitlement stands apart from the equalisation element; that is, that the equalisation element is calculated without any regard to the As-of-Right entitlement To do this would be to ignore the equalisation effects of the As-of­ Right entitlement and would result in significant double countin~. As indicated in the 1977 Annual Report (see paragraphs 2.6 and 2.7) the Commiss10n's approach is to follow the procedures laid down in the Victoria Grants Commission Act 1976 which is to determine the allocations on general equalisation principles, with the proviso that the amount' so determined for each municipality shall not be less than the "As­ of-Right Entitlement" of the municipality'. In other words, the 'As-of-Right Entitlement' is regarded simply as a base grant constraint It follows, that except for a municipality which receives an As-of-Right entitlement only, the equalisation allowances for a municipality is its total allocation, not simply the difference between the As-of-Right entitlement and the total allocation.

EQUALISATION 2.9 The Commonwealth legislation uses the long-established description of fiscal equalisation to define the broad principles to be followed by the State Grants Commissions. The primary objective is to ensure "so far as is practicable" that each municipality is able to function, by reasonable effort, at a standard not appreciably below the standards of other municipalities in the State. The term "so far as is practicable" recognises two things:

8 (i) in the foreseeable future the total amount available in any one year is unlikely to be sufficient to achieve complete fiscal equalisatiOn, so that at best the Commission's role is limited to a partial equalisation exercise; and (ii) fiscal equalisation is a rather inexact science which is delimited by the quality and availability of data and the extent of knowledge about each municipality that the Commission can draw upon at any time. 2.10 "By reasonable effort" recognises that differences among municipalities in the standard of services may simply be a reflection of Councils' policies about rating effort and the standard of services to be provided, which largely go hand in hand. The general revenue grants are not designed to subsidise those activities of municipalities which are below the standard of other municipalities simply because of differences in policy decisions. For example, a low standard of service in a municipality may be a reflection of low rate policies adopted by successive Councils; this low standard of service would not be recognised in the grant allocations. Nor would a high level of rating be recognised if this was only a reflection of a Council's policy to provide a higher standard of service than was being provided in other municipalities. 2.11 A concomitant of reasonable effort is that the methodology of fiscal equalisation be neutral in terms of the effort made by Councils to raise revenue or provide services, except that it be at a reasonable level. 'Effort neutral' means that a Council should not be able to influence the size of the allocation for its municipality by deliberate policy decisions, nor should the bases for the allocations constrain the independence of the policy-making role of Councils. If it were not so those Councils which were best able could maximise the share of the grants for their municipalities at the expense of other municipalities. Also, if the Commission were able to influence the policies of Councils because of the way by which it determined the allocations, it could become, in effect, the principal determinant of revenue-raising and expenditure policies at the local government level, which would be an abrogation of the responsibilities of the elected Councils. 2.12 A 'reasonable level of effort' is recognised, and an 'effort neutral' effect achieved, by using standard levels of rates and expenditures for the various functions and applying objective measures wherever practicable to determine what allowances should be made. The Commission relies upon the levels of rates and expenditures which Councils themselves have most commonly set as reasonable in the circumstances within which they function. The level of' reasonable effort' used by the Commission is, in effect, the consensus of the 211 municipal councils in the State.

Revenue Raising Needs 2.13 The first element in the equalisation equation, capacity to raise revenue, is a reflection of the value of rateable property within each municipality, which is the sole taxing base available to local government Clearly, municipalities with higher values of rateable property can raise a given quantum of revenue more readily than those with lower values. It is appropriate, therefore. to use this "better· off' group as the benchmark or standard against which the capacity of other mumcipalities is compared. To the extent that the capacity of a municipality is greater than the standard, then the municipality is said to have negative revenue needs, or an advantage in raising revenue. Conversely, if a municipality's capacity to raise revenue is less than the standard, the municipality is said to have positive revenue needs, or a disability in raising revenue. 2.14 A municipality with negative revenue needs, that is an advantage in raising revenue, is in a relatively better position to meet the costs of services than municipalities with positive revenue needs. Thus, the situation can arise where a

9 municipality may have high costs of municipal services because of the characteristics of the municipality but, at the same time, have a relative advantage in raising revenue and therefore be able to meet a large part of the additional costs from its own resources. It follows that relatively high costs of services within a municipality do not necessarily mean that the municipality should receive a large general revenue grant allocation. 2.15 The Commission has referred in its previous Reports to the problems it has encountered in the measurement of capac1ty to raise revenue and the ways in which it has attempted to overcome these problems. Firstly, there is the need to normalise the valuations of rateable property for each municipality. This is because in non-metropolitan areas, valuations are made in different years for the respective municipalities. Also the time period between valuations in non­ metropolitan areas differs from that in the metropolitan area. Private valuers are generally employed throughout the State to undertake the work, and because of this, there may be differences between municipalities in valuations of property which simply reflect differences in the application of valuation practices. To overcome these effects the Valuer-General provides the Commission, on a confidential basis, with valuations for each municipality adjusted to a common date on the basis of sales information held by the Valuer-General's branch. The valuations are expressed in net annual value terms, the most common basis for rating purposes throughout the State. 2.16 Secondly, there is the necessity to take account of differences in the size of municipalities. This requires the valuations for each municipality to be expressed as a value per unit Most commonly per head values are used for comparisons of taxable capacity between larger government units (i.e. for comparisons between States) but have been found to have serious defects when used for making comparisons between the very much smaller local government units. The Commission has been examining the use of per assessment and per property values as more realistic bases for comparison, arguing that the capacity of a municipality to levy a quantum of rates is not dependent upon the estimated number of persons in the area at a given time but upon the value of assessable properties within the municipality. However, difficulties have been encountered in the application of these bases to the measurement of relative revenue-raising capacity, particularly because of the problem of defining what constitutes a property. Allowances for differences in revenue-raising capacity embodied in the 1979-80 and 1980-81 allocations were based on the mean of values calculated using per head values of rateable property on the one hand and per assessment values of rateable property on the other. Since the 1981-82 allocations the Commission has moved toward allowances for differences in revenue-raising capacity based solely on values of rateable property per assessment, but having regard to relativities produced by other measurements. 2.17 Thirdly, the types of property within a municipality will also influence its capacity to raise revenue and therefore effects of variations in the mix of property types should be recognised. Thus, the Commission separately measures capacity to raise revenue from residential property, capacity to raise revenue from commercial and industrial property and capacity to raise revenue from rural and other property. Allowance is also made for the relative proportions of each of the three classes of property in the total valuation of each municipality. The allowance for capacity to raise revenue is, therefore, the sum of the allowances for the three classes of property, weighted for the mix of property types. 2.18 Since 1979-80, adjustments have been made to residential property values for Category 2 municipalities to take account of differences in values which can be related to differences in market pressures rather than to differences in financial capacity (see paragraphs 2.23-2.24 of the Commission's 1979 Report for further details). Also it has been necessary for the Commission to make adjustments to

10 residential property numbers where these numbers are inflated by a large number of undeveloped properties. The proportions of residential dwellings to total residential properties were calculated and adjustments made to the numbers of residential properties where the proportions for individual municipalities were lower than those commonly applying. 2.19 As indicated above, revenue needs were assessed mainly in relation to per assessment values of rateable property. Separate calculations were made for each ofthe three classes of property- residential, commercial and industrial, and rural and other property. The standard values of rateable property per assessed property which were used were the weighted mean values for the top 25 per cent of the State, for each class of property. The standard rates in the dollar for each property class were similarly derived, being the weighted mean rate for each property class for the top 25 per cent of municipalities (see Af!pendix IV for further details). Regard was also had to revenue needs measured m relation to per head values of rateable property, the calculations being made on the same basis as for previous years. 2.20 The allowances for 1984-85 also took into account the temporary reduction in revenue-raising capacity because of the effect on valuations of the destruction of improvements on private property as a result of the 1983 Ash Wednesday bushfires. These allowances will be of a once-for-all nature as the reconstruction of l?roperty in affected areas will be reflected in the total values of rateable property m subsequent years. Allowances of this kind for the effects of natural disasters are only contemplated where the effects on a municipality's valuation are documented by supplementary valuations of affected areas. 2.21 The Commission believes an assessment-based comparison of revenue­ raising capacity is more equitable than a population-based measurement, but it is clear that there are still a number of elements in the process which cannot be resolved satisfactorily. These elements derive from the dtsparate characteristics of the 211 municipalities in the State. There is no basic logic in the structure oflocal government and there is therefore no reason to expect a single formula to cope with the widely varying elements that make up the rate base for local government and, at the same time, produce results that do justice to the principles of equity that are the corner stone of the general revenue arrangements. For this reason the Commission has continued an examination of the "balanced budget method" for the assessment of fiscal equalisation needs. This method is similar to that originally used by the Commonwealth Grants Commission to assess the fiscal needs of claimant States but has been superceded in recent years by direct measurements of revenue and expenditure needs. 2.22 Briefly, the approach is predicated on the basis that the competence of local government is prescribed by legislation and, within broad limits, each local authority provides the range of services which are perceived to be necessary for the area, at a level which is perceived to meet reasonable community standards. To the extent that a gap exists between the total cost which would be incurred by a municipality (i.e. necessary expenditure net of specific purpose grants) in providing municipal services at standard levels and the amount able to be raised by that municipality at standard effort, the degree of fiscal inequality can be identified 2.23 The Commission considers that this method would help to resolve the major problems which exist in the measurement of revenue needs. It is intended that a discussion paper on the matter will be circulated to all municipalities for comment when the methodology is refined to the point where its use in the determination process was thought to be a practical possibility.

Expenditure Needs and Disabilities 2.24 Allowances for differences in the cost oflocal government services is the second element of the fiscal equalisation equation. Expenditure by a municipality

11 on the various functions can reflect a number of factors, e.g. Council priorities, the level of efficiency, the level of self-help, differences in the number of units to be serviced, effects of climate, topography, availability of materials, isolation from service centres, etc. The assessment of allowances should be effort neutral; that is, it should neither penalise nor reward Councils where expenditure patterns vary from the norm because of policy decisions, differences in efficiency and the level of self­ help. The allowances should however reflect differences in costs that arise because of the inherent characteristics of the population within the various municipalities and the inherent physical charactenstics of each of the municipalities. 2.25 The statistical measurement of needs and disabilities in relation to the cost of services has undergone considerable refinement in recent years, with the availability of more detailed and comprehensive data from the annual Return of Local Government Accounting and General Information. The much-improved data base has permitted more objective measurements to be made of allowances for differences in costs of services and has provided a more reliable basis for examining the possibility of further expanding the use of objective measures. Nevertheless the Commission is still required to exercise JUdgment in the evaluation of the data and its relevance to the circumstances of each municipality. This highlights the importance that the Commission attaches to the detailed inspections of each municipality. 2.26 The expenditure component of the allocations is the summation of assessments of relative needs and disabilities over the range of municipal functions, generally following the functional classification of expenditure adopted by the Australian Bureau of Statistics. The broad classifications are given in paragraph 2.35 along with the subdivisions for each classification which were considered in detail. 2.27 Unit costs were established for most of the functions shown under the sub-headings, except for Special Factors where the allowance was the net cost to the municipality of expenditure approved under Commonwealth/State arrangements for natural disaster repair and restoration work. Where unit costs could not be satisfactorily derived from the data, the Commission exercised its judgment about the allowances to be made. 2.28 Allowances for differences in costs can be assessed under two broad headings- needs and disabilities. "Needs" is the expression used to describe the number of units to be serviced in the performance of any particular function. The number may be higher (positive needs), equal to (zero needs) or less than (negative needs) the norm. For exam:('le, a municipality may have a relatively high proportion of elderly persons m its population compared with the State average proportion and would therefore have positive needs for the provision of services related to this age group. On the other hand, the same mumcipality would most likely have negative needs in relation to services for mothers and children as the proportion of children in the under 5 age group would almost certainly be less than the State average proportion. 2.29 Needs allowances are assessed by reference to objective data. For example, needs for personal services functions (health, welfare, recreation, etc.) are assessed by comparing the demographic characteristics of each municipality with the average characteristics for the State as a whole. Variations from the State average characteristics can be taken to indicate positive or negative needs and the degree of variation can be used to calculate the level of needs allowance that should be taken into account for the relevant functions. 2.30 Needs (and disabilities) calculations can be made in terms of expenditure on the relevant function per head of population or in terms of expenditure per relevant unit. The former, i.e. per head expenditure for the function, was used up to the 1980-81 allocations but a change to the latter, i.e. expenditure per relevant demographic unit, was made for the calculations used in arriving at the 1981-82

12 allocations and those for subsequent years. This change was made to remove distortions from the calculations of standards which were evident in the use of per head values and to simplify the procedures. It made little difference to the allowances made for the various functions, compared with allowances calculated using per head values. 2.31 Changes were also made to the bases for calculating road maintenance needs. These changes relate to the discounting procedures which are used to remove the effect of government grants for road maintenance from the total assessed road needs allowance. Up untill980-81, the discounting was applied after the needs allowance was assessed, that is it was applied to needs allowance only and ignored the level of government grants in relation to the standard length of road. For the 1984-85 allocations the Commission continued with the practice first adopted in 1981-82 of discounting the total length of road to reflect the level of financial involvement by each municipality in the maintenance of the various classes of roads. The needs allowances were then calculated in relation to the discounted road lengths. In this way recognition is given to the level of government grants for the whole of the road system and not only to above (or below) standard length. This change had the effect of reducing the weight given to road maintenance needs allowances in allowances for roads overall and hence reduced the weight given to allowances for roads works generally. Details of the changed procedure are given in Appendix IV. 2.32 "Disabilities" relates to differences in costs which arise essentially from the physical characteristics of each municipality. Terrain, climate, location, traffic conditions, regional use, isolation, sparsity, rate of population growth, etc. are illustrations of inherent characteristics which could influence the costs of functions in each of the municipalities compared with the norm. Recognition is also given to the ethnic characteristics of the population in different areas, which can involve Councils in higher administration costs because of the need to communicate to ratepayers and residents in a number oflanguages. Library costs may also be higher because of the need to carry multi-lingual book stocks in areas with high concentrations of non-English-speaking people or to provide a larger range oflarge print books where the proportion of elderly in the population is high. Again the variations from the norm can be reflected as positive disabilities (high costs situations). zero disabilities (normal costs situations) or negative disabilities (low costs situations).

2.33 The derivations of disability factors cannot be done directly from the data, as individual levels of expenditure may be as much the reflection of policy attitudes and differences in efficiency, as the reflection of cost differences attributable to inherent characteristics. However, expenditure levels can be used as a first indicator of cost differences compared with the norm, but other evidence, such as that from submissions and general knowledge gained from inspections, is used to confirm that differences in cost levels are a reflection of inherent characteristics and to assess the extent to which such differences should be recognised. In this regard the run of reliable data now available to the Commission is proving useful in assessing the extent of cost disabilities, particularly for the road maintenance function.

2.34 Allowances for needs and disabilities are assessed for each function by reference to the costs most commonly incurred by municipalities throughout the State in providing each function. In other words, the standard cost of service for each function against which each municipality's cost conditions are compared, is taken to be the level of expenditure most commonly decided upon by the Councils administering the 211 municipalities in the State. There is no arbitrary determination of standards by the Commission.

13 2.35 The Commission derived unit costs from the expenditure data supplied in the Return ofAccounting and General Information for the financial year ended 30 September 1983. The following parameters were used: General Administration Growth and Planning- average rate of population growth over past five years. Isolation and Sparsity - population and distance from Melbourne. Law, Order and Public Safety Fire Protection - population. Health Infants and Mothers - proportion of population aged less than five years. Preventative Services - population. Other - population. Welfare Families and Children - proportion of population aged less than five years. Aged and Disabled- proportion of population receiving pensions and supplements. Other - population. Housing and Community Amenities Street Cleaning - length of sealed roads in built-up areas. Urban Drainage - population. Household Garbage Collection and Disposal- number of households serviced on a once-a-week basis (arbitrary allowances for a twice-a­ week collection were made for a number of municipalities). Other - population. Recreation and Culture Public Halls, etc. - population. Swimming Pools, Beaches, etc. - population. Sporting Clubs, etc. -proportion of population aged between five years and thirty-five years. Parks, Gardens and Recreation Reserves - population. Libraries- population. Other Culture (Art Centres, etc.) - population. Roads and Bridges (disaggregated by road classification and by surface type). Construction and Reconstruction of Roads - main cost components such as earthworks, pavements and sealing, per kilometre; other components actual expenditure (land acquisition and fencing, relocation of services, drainage and erosion control). Construction and Reconstruction of Bridges - actual expenditure. Maintenance of Roads - length of roads per assessment Maintenance of Bridges - actual expenditure. Economic Services , Street Lighting - length of road in built-up areas. Traffic Control - population. \ Duplication Recreation, Health and Welfare, Other - number and size of population centres. Regional Facilities Recreation and Culture, Health and Welfare, Resort Areas, Historic Buildings, Aerodromes - broad judgment

14 Special Factors Natural Disasters - net cost to Council of approved repair and restoration works. 2.36 The standard costs used for assessing allowances for expenditure needs and disabilities were derived from the gross cost of the respective functions. Except for the calculation of road maintenance needs referred to in paragraph 2.31 the gross disability so assessed for a function was discounted by the proportion that expenditure on the function by a municipality from its own resources bears to its total expenditure on the function from all sources. This approach is predicated on the basis that government programs of assistance have the general aim of setting standards of service and the incidence of such assistance is restricted by the availability of funds. Therefore, it is reasonable to include expenditure from all sources when determining standard levels of expenditure; hence this approach is commonly referred to as the inclusion method The discounting of the gross allowances described above ensures that needs and disability allowances are related to ratepayers' contributions to expenditure and avoids double counting in relation to government ~rants for particular services. The total allowance for each function for differences m the cost of services is the sum of the net needs allowance and the net disabilities allowance. DETERMINING THE INDIVIDUAL ALLOCATIONS 2.37 The total fiscal equalisation allowance for a municipality is the summation of the allowances for revenue-raising capacity (plus or minus) and the net expenditure allowances (plus or minus) for the ran~e of municipal functions. The sum of the total allowances for the 211 municipahties, assessed without any heed to the constraint of the amount of funds available, will exceed the sum available for allocation by a substantial degree. Each municipality's total allowance must therefore be reduced so that the total allocated equals the total available. This is achieved by discounting each municipality's total fiscal equalisation requirement by the proportion that the amount available bears to the total sum required for the 211 munictpalities. It is important to note that the net cost to a municipality of recognised natural disaster relief and restoration measures is allowed in full and is not subject to the fore~oing discounting procedure. Therefore the amount available for purposes of the dtscounting procedure is the State's total allocation less the sum of special factor allowances. The special factor allowances are added back to the fiscal equalisation shares for the relevant municipalities when these have been finally settled. 2.38 Technical details of the various methodologies used for calculating revenue needs and expenditure needs and disabilities are given inAppendix IV. The changes made from time to time to the method of calculating the various components that make up the assessment of fiscal needs for each municipality are designed to enhance the equity of the allocations. As these changes take effect, along with other changes as a result ofbetter data and a better understanding of the features of each municipality, there may be significant changes to some of the fiscal relativities that have been established between municipalities to date. Such changes may affect the relative shares for each munictpality of the amount available for distribution each year. In the longer-run, changes to the underlying fiscal relativities should be minimal and most Councils should then be able to estimate, with reasonable certainty, their municipality's share of the amount available for distribution, subject to the qualificahons about variations in road works, valuations and development activity outlined in paragraphs 1.16 to 1.26. 2.39 The use of precise mathematical formulae may not necessarily reflect the relative fiscal needs of the 211 municipalities in the State because of the diverse range of circumstances within which they operate. Thus, the allowances calculated in the manner described in the foregoing and detailed inAppendix IV can at best be seen as a first approximation to the allocations that will be finally determined.

15 Arbitrary adjustments are made where the mathematically derived allocations produce differences in allocations that cannot be sustained in the light of other evidence and the Commission's detailed general knowledge oflocal government in the State. This exercise of judgment on the part of the Commission is the most difficult and demanding part of the whole assessment process and requires a comprehensive knowledge of the specific circumstances of each municipality. It underscores the importance of the inspections particularly, as well as the importance of updating submissions when any significant changes to circumstances occur. Above all, it underscores the importance of accuracy in completing the annual returns of information which provide a statistical background profile of each municipality. NATURAL DISASTERS 2.40 The principles of special factor allowances arising from the effects of natural disasters and Councils' decisions in relation to them were spelt out in the Commission's 1978 Annual Report, after raising the issues with conferences of local government representatives throughout the State. This arose from actions taken or proposed to be taken by some Councils following the February 1977 bushfires in the Western District, the October 1977 hail storm in the Mildura area and the February 1978 fires in the Bairnsdale area. (See paragraphs 2.35 to 2.41, Victoria Grants Commission Annual Report 1978.) 2.41 In general, the Commission can only recognise expenditure incurred by Councils as a result of the effects of natural disasters that are approved under the Commonwealth/State arrangements for natural disaster relief and restoration. On the production of documentary proof that the expenditure claimed has been approved under these arrangements, the Commission will include in the relevant allocation a special factor allowance equivalent to the net cost incurred by the Council on approved measures in relation to the disaster. Any other expenditure incurred by the Council, which is not an approved measure, is regarded as a discretionary or policy decision for which no allowance will be made. The contributions and donations made by many Councils following the 1983 Ash Wednesday bushfires are not approved measures under these guidelines and consequently no special factor allowances could be included for these expenditures. 2.42 The allocations for 1984-85 include a total of$598,199 for special factors. These special factor allowances include allowances for the net cost of approved relief and restoration measures associated with the Ash Wednesday bushfires, as well as allowances for the net cost of restoring municipal assets damaged by floods which occurred in areas of the State in 1982-83. ACKNOWLEDGEMENTS 2.43 The availability of financial, demographic, and other data which is essential to the Commission's work owes much to the efforts of the staff of the Finance and Distribution Branch of the Victorian office of the Australian Bureau of Statistics. Their work on the design of the returns and in verifying and collating the data is gratefully acknowledged. 2.44 The processing of a large amount of statistical and other material would not have been possible within the Commission's time constraints without the co­ operation and expertise of the Government Computing Service. We are appreciative of this service to the Commission. 2.45 We wish also to record our appreciation for the help of the Local Government Department throu~hout the year, especially the Valuer-General's Office which has supplied us wtth much detailed information about valuation changes throughout the State. 2.46 Finally we acknowledge the help and support of the Commission's staff who have been equal to all the demands put on them throughout another busy round of inspections, data analysis and associated tasks.

16 APPENDIX I VICTORIA GRANTS COMMISSION The Hon. F. N. Wilkes, M.P., Minister for Local Government, 480 Collins Street, MELBOURNE. VIC. 3000. Determination of Allocations of General Revenue Assistance to Municipal Councils in 1984-85 We have pleasure in submitting to you the Determination of allocations of general revenue grants to municipal Councils in Victoria for the 1984-85 financial year. Victoria's share of general revenue grants for local government for 1984-85, being made available under the Commonwealth Local Government (Personal Income Tax Sharing) Act 1976, is $123,829,199 an increase of 5.92 per cent on the State's share for 1983-84. The total amount has been distributed among the 211 municipalities in the State in accordance with the bases laid down in section 12 of the Victoria Grants Commission Act 1976. That is to say, the Commission has followed broad equalisation principles, giving consideration to the expenditure needs of each municipality and the cost disabilities encountered in providing municipal services, and to the effort made to function effectively and provide services at a reasonable standard. Recognition has been given to special factors, such as natural disasters, which have impinged upon the operatiOns of a number of municipal Councils throughout the State during the 1982-83 financial year. Allowances for the financial effects of these special factors amount to $598,199 and are listed in the attachment to this Determination along with the special factor allowances included in the 1983-84 allocations. These special factor allowances include allowances for the net cost of approved relief and restoration measures associated with the Ash Wednesday bushfires, as well as allowances for the net cost of restoring municipal assets damaged by floods which occurred in areas of the State in 1982-83. The allocation for each municipality is not less than its entitlement As-of­ Right The As-of-Right entitlements are calculated by taking 40 per cent of the total amount for the State and allocating this on the basis of population, 85 per cent, and area 15 per cent The relevant figures for calculating the 1984-85 As-of-Right entitlements are: Population $10.435347 per head Area $32.715677 per square kilometre. The allocations for two municipalities, the Shires of Rosedale and Walpeup, were determined by reference to their respective entitlement As-of-Right A further forty-four municipalities throughout the State have been inspected since the last allocations were announced; this completed the third round of a five­ year programme of inspecting each municipality. Expenditure on road construction and reconstruction continues to be the most volatile element in the expenditure component of the allocations. Variations in the amount of expenditure as well as the cost characteristics of projects have had a

17 significant effect on the allocations determined for a number of municipalities. Also the relative strength of property values in bayside and inner eastern metropolitan areas, in irrigated farmland and wheat-growing areas, exhibited in the previous review period, continued to be reflected in lower allowances for revenue-raising capacity for relevant municipalities. Because of the small margin this year with which to accommodate these variations, the allocations for a number of municipalities are less than allocations for 1983-84. We remain indebted to the Councillors and staff of all municipalities for the assistance given to the Commission throughout the year, especially to those representing the municipalities in which inspections were undertaken. The continued co-operation and assistance of the Australian Bureau of Statistics in providing essential statistical information is gratefully acknowled¥ed, as is the help given by the Government Computing Service in processing this mformation. We also acknowledge the support of the Department of Local Government, particularly the Valuer-General's Office which has provided us with much detailed mformation about valuations for each municipality. The contribution of the Commission's staff in the provision of support services is similarly gratefully acknowledged.

D.V.MOYE Chairman

L. F. CHEFFERS Member

J.M. WALTON Member

W. A. PHILLIPS Secretary

31 August 1984.

18 APPENDIX l - continued VICTORIA GRANTS COMMISSION

DETERMINATION OF ALLOCATIONS OF GENERAL REVENUE GRANTS TO MUNICIPAL COUNCILS IN VICTORIA- 1984-85 FINANCIAL YEAR

------·············------Municipality $ Municipality $ ...... -- ...... ~ ~------Alberton (S) ...... 551,000 Colac (S) ...... 428,000 Alexandra (S) ...... 312,000 Collingwood (C) ...... 658,000 Altona (C) ...... 590,000 Corio (S) ...... 1,185,000 Arapiles (S) ...... 161,600 Cranbourne (S) ...... 980,000 Ararat (C) ...... 440,000 Creswick (S) ...... 310,000 Ararat (S) ...... 483,000 Croydon (C) ...... 980,000 Avoca (S) ...... 276,900 Dandenong (C) ...... 1,220,000 Avon (S) ...... 240,000 Daylesford & Glenly:on (S) . . . 455,000 Bacchus Marsh (S) ...... 358,000 Deakin (S) ...... 480,000 Baimsdale ('T) ...... 488,000 Diamond Valley (S) ...... 1,190,000 Baimsdale (S) ...... 428,000 Dimboola (S) ...... 380,000 Ballaarat (C) ...... 1,492,000 Donald (S) ...... 224,000 Ballan (S) ...... 204,000 Doncaster & Tstowe (C) . . . 1,460,000 Ballarat (S) ...... 730,000 Dundas (S) ...... 254,500 Bannockbum (S) ...... 175,000 Dunmunkle (S) ...... 260,000 Barrabool (S) ...... 303,600 Eaglehawk (B) ...... 358,000 Bass (S) ...... 345,000 East Loddon (S) ...... 172,300 Beechworth (S) ...... 307,000 (C) ...... 342,000 Belfast (S) ...... 112,000 Eltham (S) ...... 1,000,000 Bellarine (S) ...... 980,000 Essendon (C) ...... 1,350,000 Benalla (C) ...... 385,000 (S) ...... 275,000 Benalla (S) ...... 207,700 Fitzroy (C) ...... 736,000 Bendigo (C) ...... 1,365,000 Flinders (S) ...... 640,000 Berwick (C) ...... 1,005,000 Footscray (C) ...... 1,880,000 Bet Bet(S) ...... 225,800 Frankston (C) ...... 1,595,000 Birchip (S) ...... 151,200 Gee1ong (C) ...... 470,000 Box Hill (C) ...... 1,003,000 Geelong West (C) ...... 508,000 Bright (S) ...... 418,000 Gisbome (S) ...... 326,100 Brighton (C) ...... 425,000 Glenelg (S) ...... 464,500 Broadford (S) ...... 170,000 Gordon (S) ...... 307,600 Broadmeadows (C) ...... 2,669,000 Gou1bum (S) ...... 146,000 Brunswick (C) ...... 1,315,000 Grenville (S) ...... 235,000 Bulla (S) ...... 490,000 Hamilton (C) ...... 495,000 Bu1n Bu1n (S) ...... 566,300 Hampden (S) ...... 490,700 Bun~aree (S) ...... 165,000 Hastings (S) ...... 342,000 Bunmyong (S) ...... 450,000 Hawthorn (C) ...... 450,000 Camberwell (C) ...... 1,328,000 Healesville (S) ...... 532,000 Camperdown (T) ...... 187,000 Heidelberg (C) ...... 1,490,000 Castlemaine (C) ...... 430,000 Heytesbury (S) ...... 667,800 Caulfie1d (C) ...... 1,290,000 Horsham (C) ...... 645,000 Char1ton (S) ...... 161,800 Huntly (S) ...... 189,299 Chelsea (C) ...... 980,000 Kaniva (S) ...... 200,000 Chiltern (S) ...... 125,000 Kara Kara (S) ...... 156,600 Cobram (S) ...... 365,000 Karkarooc (S) ...... 384,900 Coburg (C) ...... 1,515,000 Keilor (C) ...... 2,048,000 Cohuna (S) ...... 277,300 Kerang (B) ...... 220,000 Colac (C) ...... 417,000 Kerang (S) ...... 392,000

19 APPENDIX 1 - continued

Municipality $ Municipality $ Kew (C) ...... 445,000 Portland (T) ...... 515,000 Kilmore (S) ...... 272,100 Portland (S) ...... 619,000 Knox (C) ...... 1,725,000 Port Melbourne (C) ...... 235,000 Koroit (B) ...... 65,000 Prahran (C) ...... 750,000 Korong (S) ...... 412,000 Preston (C) ...... 1,882,000 Korumburra (S) ...... 482,000 Pyalong (S) ...... 37,000 Kowree (S) ...... 350,000 Queenscliffe (B) ...... 144,000 Kyabram (T) ...... 255,000 Richmond (C) ...... 718,000 Kyneton (S) ...... 415,000 Ringwood (C) ...... 820,000 Leigh (S) ...... 142,000 Ripon (S) ...... 260,000 Lexton (S) ...... 88,000 Rochester (S) ...... 530,000 Lillydale (S) ...... 1,583,600 Rodney (S) ...... 660,000 Lowan (S) ...... 278,000 Romsey (S) ...... 192,000 Mclvor (S) ...... 170,000 Rosedale (S) ...... 147,000 Maffra (S) ...... 570,000 Rutherglen (S) ...... 189,000 Maldon (S) ...... 185,000 St Arnaud (T) ...... 196,000 Malvern (C) ...... 690,000 St Kilda (C) ...... 1,215,000 Mansfield (S) ...... 410,000 Sale (C) ...... 618,000 Marong (S) ...... 426,000 Sandringham (C) ...... 502,000 Maryborough (C) ...... 396,000 Sebastopol (B) ...... 300,000 Melbourne (C) ...... 2,185,000 Seymour(S) ...... 470,000 Melton (S) ...... 720,000 (C) ...... 798,000 Metcalfe (S) ...... 162,000 Shepparton (S) ...... 460,000 Mildura (C) ...... 704,000 Sherbrooke (S) ...... 1,110,700 Mildura (S) ...... 1,070,000 South Barwon (C) ...... 1,085,000 Minhamite (S) ...... 230,000 South Gippsland (S) ...... 478,000 Mirboo (S) ...... 144,000 South Melbourne (C) ...... 350,000 Moe (C) ...... 710,000 Springvale (C) ...... 1,430,000 Moorabbin (C) ...... 1,185,000 Stawell (T) ...... 368,000 Mordialloc (C) ...... 710,000 Stawell (S) ...... 280,000 Mornington (S) ...... 545,000 Strathfieldsaye (S) ...... 455,000 Mortlake (S) ...... 285,500 Sunshine (C) ...... 2,630,000 Morwell (S) ...... 1,102,000 Swan Hill (C) ...... 463,000 Mount Rouse (S) ...... 165,000 Swan Hill (S) ...... 806,000 Myrtleford (S) ...... 270,000 Talbot & Clunes (S) ...... 201,000 Narracan (S) ...... 622,000 Tallangatta (S) ...... 358,000 Nathalia (S) ...... 248,000 Tambo (S) ...... 572,000 Newham & Woodend (S) . . . 212,700 Trara1gon (C) ...... 788,000 Newstead (S) ...... 152,000 Traralgon (S) ...... 124,500 Newtown (C) ...... 340,000 Tullaroop (S) ...... 160,000 Northcote (C) ...... 1,550,000 Tungamah (S) ...... 263,000 (S) ...... 390,000 Upper Murray (S) ...... 253,000 Nunawading (C) ...... I ,505,000 Upper Yarra (S) ...... 511,600 Oakleigh (C) ...... 958,000 Vwlet Town (S) ...... 122,000 Omeo (S) ...... 238,000 Wa1peup (S) ...... 392,000 Orbost (S) ...... 603,400 Wangaratta (C) ...... 685,000 Otway (S) ...... 484,000 Wangaratta (S) ...... 127,000 Oxley (S) ...... 286,100 Wannon (S) ...... 327,900 Pakenham (S) ...... 786,800 Waranga (S) ...... 450,400 Phillip Island (S) ...... 382,000 Warracknabeal (S) ...... 298,000 Port Fairy (B) ...... 180,000 Warragul (S) ...... 422,000

20 APPENDIX I - continued

Municipality $ -····~~····~------.. -----·· Warrnambool (C) ...... 970,000 Warrnambool (S) ...... 500,800 Waverley (C) ...... 1,465,000 Werribee (S) ...... 1,312,000 Whittlesea (S) ...... 1,490,000 Williamstown (C) ...... 1,005,000 Wimmera (S) ...... 295,100 Winchelsea (S) ...... 380,000 Wodonga (C) ...... 804,700 Wonthaggi (B) ...... 400,000 Woorayl (S) ...... 677.000 Wycheproof (S) ...... 430,000 Yackandandah (S) ...... 247,800 Yarrawonga (S) ...... 306,000 Yea ...... 255,000 TOTAL $123,829,199 ====-·----~-==-

D. V. MOYE. Chairman

L. F. CHEFFERS, Member

J. M. W ALTON, Member

31 August, 1984.

21 APPENDIX I - continued

VICTORIA GRANTS COMMISSION

GENERAL REVIEW GRANTS TO MUNICIPALITIES IN VICTORIA

AMOUNTS INCLUDED IN ALLOCATIONS FOR SPECIAL FACTORS 1983·84 AND 1984·85 The Commission has made allowances for the cost of special factors for a number of municipalities. These mainly relate to the net cost of repairing and restoring municipal assets damaged as a result of natural disasters, where such costs are recognised under intergovemment natural disaster assistance arrange­ ments. These special allowances apply for the year in question only. Therefore in making comparisons of allocations between municipalities, or of individual municipalities from year to year, the relevant amounts shown below should be deducted from the allocations for the respective municipalities.

Amount included for Special Factors $ $ Municipality Natural Disasters Natural Disasters 1983-84 1984-85

··------~~---

Alberton (S) ••• " ...... ~ 0 0 • Nil 35,000 Altona (C) ...... 22,115 Nil Arapiles (S) ...... 13,100 5,600

Avoca (S) ••• 9 • ~ •••• 0 • ~ ••• Nil 11,900

Barrabool (S) ...... 0 + •• 0 •• 0 Nil 28,600 Beechworth (S) ...... 19,000 Nil Benalla (S) ...... 7,900 3,700

Bendigo (C) •••••••••• 0 .... 16,830 Nil Bet Bet (S) ...... 13,400 9,800

Birchip (S) •••••••• 0 ~ 0 •• 0 • 2,600 11,200

Bright (S) ••••••• 0 0 •••• ~ •• 14,000 Nil Buln Buln (S) ...... Nil 10,300

Charlton (S) ...... 60,000 9,800 Cobram (S) ...... 28,000 Nil Cohuna (S) ...... Nil 3,300

Deakin ~S) ...... 28,000 Nil Dimboo a (S) ...... 3,600 Nil Dundas (S) ...... Nil 29,500

Dunmunkle (S) .. ~ .. ~ ..... 18,200 Nil East Loddon (S) ...... 600 2,300 Gisbome (S) ...... Nil 10,100 Glenelg (S) ...... Nil 4,500

Gordon (S) ...... ~ ... 2,000 22,600 Hampden (S) ...... Nil 20,700 Heytesbury (S) ...... Nil 19,800 Huntly (S) ...... 25,200 14,299

22 APPENDIX I - continued

Amounts included for Special Factors $ $ Municipality Natural Disasters Natural Disasters 1983-84 1984-85 Kaniva (S) ...... 6,000 Nil Kara Kara (S) ...... 23,000 13,600 Karkarooc (S) ...... 6,200 4,900 Kerang (S) ...... 35,000 Nil Kilmore (S) ...... Nil 14,100 Korong (S) ...... 6,000 22,000 Kowree (S) ...... 10,000 Nil Kyabram (1) ...... 19,500 Nil

Lillydale (S) ...... Nil 23,600 Lowan (S) ...... 10,000 Nil Mclvor (S) ...... 21,400 Nil

Marong (S) ...... 24,100 Nil Mortlake (S) ...... Nil 35,500 Myrtleford (S) ...... 15,700 Nil

Nathalia (S) ...... 15,000 Nil Newham & Woodend (S) .. . Nil 7,700 Numurkah (S) ...... 9,500 Nil

Orbost (S) ...... Nil 23,400 Oxley (S) ...... 25,700 6,100

Pakenham (S) ...... Nil 16,800 Pyalong (S) ...... 5,600 Nil

Rochester (S) ...... 35,000 Nil Rodney (S) ...... 30,000 Nil Rutherglen (S) ...... 14,000 Nil

St Amaud (1) ...... Nil 4,000 Sandringham (C) ...... 17,300 Nil Shepparton (S) ...... 14,000 Nil Sherbrooke (S) ...... Nil 10,700 Stawell (S) ...... 34,000 1,000 Swan Hill (C) ...... 7,700 Nil Swan Hill (S) ...... 19,000 Nil

Tallangatta (S) ...... 18,000 8,000 Traralgon (S) ...... Nil 4,500 Tungamah ( S) ...... 12,600 10,000

Upper Yarra (S) ...... Nil 34,600

Violet Town (S) ...... 35,000 Nil

23 APPENDIX I - continued

Amounts included for Special Factors $ $ Municipality Natural Disasters Natural Disasters 1983-84 . 1984-85 Wangaratta (S) ...... 2,500 Nil Wannon (S) ...... Nil 17,900 Waranga (S) ...... 29,700 5,400 W arracknabeal (S) ...... 11,600 Nil Warrnambool (S) ...... Nil 32,800 Wimmera (S) ...... 24,000 11,100 Wodonga (C) ...... Nil 4,700 Yackandandah (S) ...... 32,800 Yarrawonga (S) ...... Nil TOTAL 598,199

24 APPENDIX 11 MUNICIPALITIES INSPECTED 1983-84

Date 1983 8 November ...... 9 November...... 10 November ...... 22 November ...... 23 November ...... 24 November ...... 29 November ...... 30 November...... Shire of Nathalia 1 December ...... 13 December ...... 14 December ...... Shire of Ki1more 15 December ...... Shire of Broadford 1984 17 January ...... Shire of Cobram 18 January ...... Shire ofYarrawonga 19 January ...... Shire ofTungamah 24 January ...... Shire of Flinders 25 January ...... 26 January ...... Shire of Mornington 21 February ...... 22 February ...... 23 February ...... 27 February ...... 28 February ...... Shire of Orbost 29 February ...... Shire of Tambo 1 March ...... Shire of Tambo 20 March ...... City of Preston 21 March ...... City of Northcote 22 March ...... 27 March ...... 28 March ...... City of Knox 29 March ...... 10 April ...... 11 April ...... Shire of South Gippsland 12 April ...... 1 May ...... -. . . 2 May ...... City of Maryborough 3 May ...... 15 May ...... 16 May ...... 17 May ...... 22 May ...... Shire of Violet Town 23 May ...... 24 May ...... Shire of Seymour 5 June ...... 6 June ...... 7 June ...... Shire of Daylesford and Glenlyon

25 APPENDIX Ill

CATEGORIES OF MUNICIPALITIES (As Revised 1979)

CATEGORY I (42 Councils) Altona City Dandenong City Knox City Preston City Box Hill City Diamond Valley Shire Malvern City Richmond City Brighton City Doncaster & Templestowe City Melbourne City Ringwood City Broadmeadows City Essendon City Moorabbin City St. Kilda City Brunswick City Fitzroy City Mordialloc City Sandringham City Camberwell City Footscray City Northcote City South Melbourne Cito Caulfield City Frankston City Nunawading City Springvale City · Chelsea City Hawthorn City Oakleigh City Sunshine City Coburg City Heidelberg City Port Melbourne City Waverley City Collingwood City Keilor City Prahran City Williamstown City Croydon City Kew City

CATEGORY 2 (34 Councils} Ararat City Echuca City Moe City Shepparton City Bairnsdale Town Geelong City Newtown City Stawell Town Ballaarat City Geelong West City Port Fairy Borough Swan Hill City Benalla City Hamilton City Portland Town Traralgon City Bendigo City Horsham City Queenscliffe Borough Wangaratta City Camperdown Town Kerang Borough St. Arnaud Town Warrnambool City Castlemaine City Kyabram Town Sale City Wodonga City Colac City Maryborough City Sebastopol Borough Wonthaggi Borough Eaglehawk Borough Mildura City

CATEGORY 3 (23 Councils} Ballarat Shire Eltham Shire Mornington Shire South Barwon City Bellarine Shire Flinders Shire Morwell Shire Strathfieldsaye Shire Berwick City Hastings Shire Pakenham Shire Warragul Shire Bulla Shire Lillydale Shire Rodney Shire Werribee Shire Corio Shire Melton Shire Seymour Shire Whittlesea Shire Cranbourne Shire Mildura Shire Sherbrooke Shire

CATEGORY 4 (ll2 Councils) Alberton Shire Bet Bet Shire Dimboola Shire Kaniva Shire Alexandra Shire Birchip Shire Donald Shire Kara Kara Shire Arapiles Shire Bright Shire Dundas Shire Karkarooc Shire Ararat Shire Broadford Shire Dunmunkle Shire Kerang Shire Avoca Shire Buln Buln Shire East Loddon Shire Kilmore Shire Avon Shire Bungaree Shire Euroa Shire Koroit Borough Bacchus Marsh Shire Buninyong Shire Gisborne Shire Korong Shire Bairnsdale Shire Charlton Shire Glenelg Shire Korumburra Shire Ballan Shire Chiltern Shire Gordon Shire Kowree Shire Bannockburn Shire Cobram Shire Goulburn Shire Kyneton Shire Barrabool Shire Cohuna Shire Grenville Shire Leigh Shire Bass Shire Colac Shire Hampden Shire Lexton Shire Beechworth Shire Creswick Shire Healesville Shire Lowan Shire Belfast Shire Daylesford & Glenlyon Shire Heytesbury Shire Mclvor Shire Benalla Shire Deakin Shire Huntly Shire Maffra Shire

26 APPENDIX Ill - continued

CATEGORY 4 {112 Councils) -continued Maldon Shire Numurkah Shire Shepparton Shire Walpeup Shire Mansfield Shire Omeo Shire South Gippsland Shire Wangaratta Shire Marong Shire Orbost Shire Stawell Shire Wannon Shire Metcalfe Shire Otway Shire Swan Hill Shire Waranga Shire Minhamite Shire Oxley Shire Talbot & Clunes Shire Warracknabeal Shire Mirboo Shire Phillip Island Shire Tallangatta Shire Warrnambool Shire Mortlake Shire Portland Shire Tambo Shire Wimmera Shire Mount Rouse Shire Pyalong Shire Traralgon Shire Winchelsea Shire Myrtleford Shire Ripon Shire Tullaroop Shire Woorayl Shire Narracan Shire Rochester Shire Tungamah Shire Wycheproof Shire Nathalia Shire Romsey Shire Upper Yakandandah Shire Newham & Woodend Rosedale Shire Upper Yarra Shire Yarrawonga Shire Shire Rutherglen Shire Violet Town Shire Yea Shire Newstead Shire

27 APPENDIX IV FORMULAE GENERAL FORMULA Gc =R., + Ec Where G = grant = relevant municipality (claimant) R = revenue component E expenditure component The Revenue Component (R) for any municipality can be expressed as:

Where P = population, number of assessments or other parameter t rate in $(tax rate) • = standard T = revenue or tax base (value of rateable property) per head, or assessment, or other parameter and the Expenditure Component (E) as E.: = E,.g, Where&: disability factor for the municipality so that the general formula becomes: Gc = Pc • l;.(T, - Tc} + E, . &: REVENUE COMPONENT (R) R: = Pc. t;.(T,- Tc) This is the basic formula used by the Commission. T, is the weighted average of the top 25 per cent of muncipalities in the State and, measured in assessment terms, is derived as follows: T = total value of rateable property of top 25 per ct;nJnd '' total number of assessments in top 25 per cent' _ total rates collected by top 25 per cent t. - total value of rateable property of top 25 per cent The 'top 25 per cent' is obtained by ranking municipalities in order of value of rateable property per assessment Assessments are classified into three property types- residential, commercial and industrial, and rural and other- so that allowances for differences in capacity to raise revenue can be weighted to take account of the different mixes of property within a municipality. This is achieved in the following way:

RESIDENTIAL = total value of residential property of top 25 per cent . d total number of residential assessments in top 25 per cent' an = total rates collected from residential property by top 25 per cent t;., total value of rateable property of top 25 per cent (, = residential)

28 APPENDIX IV- continued Similarly for 'Commercial and Industrial' (C) and 'Rural and Other' (0), substituting the relevant figures in respect of each for the residential property figures. The total allowance for revenue-raising capacity for each municipality is the sum of the allowances calculated for each of the three property classes for each municipality. The weighting which makes allowances for the contribution that each class of property makes to the rate base for each municipality is accomplished by adjustmg the assessment numbers for each municipality accordin~ to a standard distribution of the three classes of property. This standard distribution is obtained by dividing the number of assessments for the State for each type of property by the total number of all assessments for the State, viz: .E residential asses.sments in State (= RES) + .E all assessments m State

.Ecommercial and. industrial assessments in State (= COM) + .E all assessments m State

.E rural and other ~ssessments in State (= OTH) = 1 .E all assessments m State i.e. RES + COM + OTH = 1 The standard distribution is then applied to the total number of properties in each local authority to obtain a standardised property distribution for each authority. Adjusted values per property for each class of property are then obtained for each local authority by dividing the standardised property class number into the actual value forth at class of property in the local authority. In terms of the basic formula, for each property class calculation, the relevant figures as derived would enter the equation as Tc.

Adjusted assessment numbers for i•h municipality = .E; assessment numbers . RES + L; assessment numbers . COM + .E; assessment numbers. OTH Then, T = 2:; value of residential property er .E; assessment numbers. RES T = .E; value of commercial and industrial property ; and cc_ L; assessment numbers . COM T = L; value of rural and other property eo .E; assessment numbers. OTH and R, = L; assessment numbers . RES . f.r (T,r - Tcr) + L; assessment numbers. COM. f.c (T,.,- Tc,) + L; assessment numbers. OTH. t,., (Tso- Tco) = L; assessment numbers. (RES. t.r (Tsr- Tcr) + COM. t,, (Tsc - Tee) + OTH · f.o (T,o - Tco)]

29 APPENDIX IV - continued EXPENDITURE COMPONENT (E) Ec=E,.g, Allowances for expenditure components can be separated into two elements: a needs allowance and a disabilities allowance. The needs allowance takes account of the differences between municipalities in the number of eligible units to be served, while the disabilities allowance recognises differences in the cost of providing the relevant service which arise because of differences in the inherent characteristics of municipalities. Some examples follow: ROADS. Using the number of assessments as the parameter for assessing road needs (i.e. comparing the length of road per assessment against the standard length per assessment) the formula is: A.C, (~-~) Where A = municipality's number of assessments C, = standard cost per kilometre Km.: = municipality's length of road responsibility per assessment A K:m. = standard length of road responsibility per assessment A. Road cost disabilities are calculated by the formula: Km.:. C,. & Where Km.: = municipality's total length of road responsibilitY in kilometres C, = standard cost per kilometre & = municipality's cost disability factor In order to establish the impact on the ratepayer (as some part of roads expenditure is already being met by government grants) a discount factor is applied in both the road needs and the road disabilities calculations, the discount factor being the proportion that the municipality's expenditure from its own resources bears to its total expenditure on roads. Because funding arrangements for main roads differ from those for unclassified roads, separate discount factors are calculated for the two categories. The discount factors are applied to the relevant lengths of road for each municipality to give implicit road lengths of full financial responsibility. The expenditure allowances for roads, is the sum of the two calculations - the needs calculation and the disabilities calculation. The final formula is therefore:

GR = A . C, ( ~ - ~·) + Km.: . C, . &

Where GR = municipality's grant for road needs and disabilities The standard cost per assessment may vary according to the type of road surface. Therefore the calculations for needs and for disabilities take account of the proportions of sealed, formed and surfaced, formed only and unformed roads.

30 APPENDIX IV - continued HEALTH AND WELFARE. As for Roads, calculations can be made to assess needs and disabilities related to particular Health and Welfare functions. For example, for services to the pensionable group, the formula is:

GA., = [ Pc . C(A), ( ~ - ~) + Pc . C(A), . & ] D Where GA.: allowance for expenditure needs and disabilities in relation to services for the pensionable group pc municipality's population C(A), = standard cost of services for pensionable group per head of eligible population A.: = proportion of persons in municipality receiving pensions and P:" supplements A. _ standard proportion of pensionable group (e.g. State average P, - proportion) D = discount factor Similarly, calculations can be made for needs and disabilities in relation to any function where a demographic characteristic is an appropriate parameter by sub­ stituting the relevant characteristic for A. the pensionable group. In other areas oflocal government expenditure, where needs are not a factor, the calculations are simply related to cost disabilities and are based on the general formula: GC= (E,. &) D Where Gc = allowance for the function E, = standard gross cost of the function & = disability factor for the municipality D = discount factor This generally applies to specific services such as garbage, traffic controL street lighting, drainage and the like. It is to be noted that using gross costs as the basis for deriving standard costs requires that a discount factor, equal to the proportion that the municipality's expenditure on a function from its own resources bears to total expenditure on that function, be applied to all expenditure functions. DISABILITY FACTORS Ifa municipality's expenditure on a function reflected no other factor than its cost of providing the function at a level which was no different from the level of service normally provided in other municipalities (i.e. the level ofservice was standard) then its disability factor could be derived simply by: &=E.,-1 E, Where & = disability factor Ec = municipality's expenditure per unit on the function E, = standard expenditure per unit on the function (subtracting I from_s. reduces the factor to a fraction) E,

31 APPENDIX IV - continued However, a municipality's expenditure on a function might reflect factors other than cost disabilities, such as priorities set by the Council which may differ from those set by other Councils, or the level of efficiency in providing the function. Neither of these factors should be allowed to influence the size of a grant to a municipality. For this reason, the fixing of disability factors for each municipality is largely a matter of judgment, based on the evidence available to the Comm1ssion and its knowledge of the circumstances of each municipality.

32 APPENDIX V DISTRIBliTION OF RATEABLE PROPERTY, RATE INCOME, RATING AND POPULATION 1975-76 to 1982-83 l. The values of rateable property have been derived from Valuer General estimates of rateable property at the beginning of the local government financial year - 1 October. In this respect they differ from the figures used by the Commonwealth Grants Commission which were those applying at the end of the financial year. 2. Statistics for rate income were derived from the "Return of Accounting and General Information" for the relevant financial year. The figures are a revision of the preliminary estimates presented in previous Reports. 3. Population figures for 1975-76 to 1979-80 have been derived from the revised annual estimates of population published by the Australian Bureau of Statistics based on the results of the 1976 Census. Figures for 1980-81 are based on resident population data collected in the 1981 Census and detailed in the Bureau's Catalogue Number 3201.2 dated 17 June 1982. Figures for 1982-83 have been derived from revised estimates of resident population (catalogue number 3203.2 dated 8 March 1984) which are based on the results of the 1981 Census. 4. Due to changes in the categorisation of municipalities the figures presented below differ from the corresponding figures appearing in Reports prior to 1979. 5. Minor discrepancies between figures may occur in some instances due to rounding.

Rateable Implied Year Property Rate Income Rate in Population (1 October- NAV $(cents) at 30 September) 30 June $m $ head $m $ head

METROPOLITAN MUNICIPALITIES 1975-76 ...... 1800.0 769.49 157.5 70.41 9.2 2,339,200 1976-77 ...... 2250.1 963.10 174.7 76.43 7.9 2,336,300 1977-78 ...... 2334.0 999.76 197.7 84.73 8.5 2,334,500 1978-79 ...... 2361.5 1007.98 214.4 91.51 9.1 2,342,800 1979-80 ...... 2527.1 1077.52 238.6 101.74 9.4 2,345,300 1980-81 ...... 2739.2 1155.20 269.7 113.76 9.8 2,371,200 1981-82 ...... 3138.7 1314.47 308.0 128.99 9.8 2,387,800 1982-83 ...... 3403.8 1419.97 357.5 149.15 10.5 2,397,100 ·····--···------PROVINCIAL CITIES AND TOWNS ------···------.... -----~------.. ·------~ .. -- 1975-76 ...... 156.1 396.34 22.4 61.60 15.5 393,750 1976-77 ...... 235.9 594.68 24.8 67.60 11.4 396,630 1977-78 ...... 272.3 681.16 29.5 73.57 10.8 399,760 1978-79 ...... 269.9 737.00 32.6 81.92 11.1 402,850 1979-80 ...... 336.3 826.96 36.7 90.31 10.9 406,670 1980-81 ...... 383.1 940.03 44.8 109.81 11.7 407,540 1981-82 ...... 413.2 1004.28 49.2 119.58 11.9 411,440 1982-83 ...... 429.4 1032.26 57.5 138.22 13.4 415,980

33 APPENDIX V - continued

Rateable Implied Year Property Rate Income Rate in Population (1 October- NAV $(cents) at 30 September) 30 June $m $per head $m $per head ALL OTHER MUNICIPALITIES 1975-76 ...... 698.7 692.23 77.1 79.30 11.5 1,009,400 1976-77 ...... 1011.5 966.86 85.1 84.53 8.7 1,046,200 1977-78 ...... 1155.5 1068.47 98.7 94.03 8.8 1,081,410 1978-79 ...... 1214.9 1099.05 110.6 102.77 9.4 1,105,410 1979-80 ...... 1333.1 1176.47 125.2 110.49 9.4 1,133,140 1980-81 ...... 1505.9 1287.48 146.3 125.12 9.7 1,169,650 1981-82 ...... 1704.1 1426.30 166.7 139.53 9.8 1,194,770 1982-83 ...... 1837.3 1504.17 189.8 155.41 10.3 1,221,470 TOTAL FOR STATE ··--·· 1975-76 ...... 2654.8 709.39 257.0 71.92 10.1 3,742,350 1976-77 ...... 3497.5 925.48 284.6 77.75 8.4 3,779,130 1977-78 ...... 3761.7 985.86 325.9 86.20 8.7 3,815,670 1978-79 ...... 3873.3 1005.78 357.6 93.74 9.3 3,851,060 1979-80 ...... 4196.5 1080.15 400.5 103.09 9.5 3,885,110 1980-81 ...... 4628.2 1172.17 460.8 116.71 10.0 3,948,390 1981-82 ...... 5256.0 1315.97 523.9 131.17 10.0 3,994,010 1982-83 ...... 5670.5 1405.49 604.8 149.91 10.7 4,034,550 NOTE: Statistics relating to the financial distribution of municipal expenditure will appear in detail in the Australian Bureau of Statistics local government bulletins.

34 APPENDIX VI TAX SHARING FUNDS FOR LOCAL GOVERNMENT AUTHORITIES 1974-75 to 1984-85

($'000)

New South Queens- South Western Tas- Wales Victoria land Australia Australia mania Total ...... ~ .... ~ ··-- 1974-75 (a) 21,359 14,630 8,954 4,774 4,959 1,669 56,345 1975-76 (a) 29,257 20,242 13,808 6,785 7,524 2,292 79,908 1976-77 (b) 51,289 35,398 24,222 ll,925 13,162 4,004 140,000 1977-78 (b) 60,341 42,078 27,875 14,220 15,524 5,290 165,328 1978-79 (b) 65,487 45,666 30,252 15,433 16,848 5,741 179,427 1979-80 (b) (c) 80,930 56,436 37,387 19,072 20,821 7,095 221,739 1980-81 (b) (d) 109,780 76,554 50,714 25,871 28,243 9,624 300,786 1981-82 (b) (d) 128,058 89,300 59,158 30,178 32,945 11,227 350,865 1982-83 (b) (d) 154,928 108,037 71,571 36,510 39,858 13,582 424,486 1983-84 (b) (d) 167,647 ll6,907 77,447 39,507 43,130 14,697 459,335 1984-85 (b) (d) 177,574 123,829 82,033 41,847 45,684 15,568 486,534 TOTAL 1,046,650 729,077 483,421 246,122 268,698 90,789 2,864,753

(a) Amounts recommended by the Commonwealth Grants Commission. (b) Allocation between States based on a percentage distribution recommended by the Commonwealth Grants Commission. (c) Increase in local government share to 1.75 per cent of net personal income tax collections. (d) Increase in local government share to 2.00 per cent of net personal income tax collections. NOTE: Minor discrepancies in the totals may occur in some instances due to rounding. SOURCE: Prior to 1978-79, 'Payments to or for the States, the Northern Territory and Local Government Authorities 1977-78'. 1979-80 to 1982-83, 'Payments to or for the States, the Northern Territory and Local Government Authorities 1982-83'. 1983-84 on, 'Payments to or for the States, the Northern Territory and Local Government Authorities 1984-85'.

F D Atlcinson Government Printer Melbourne

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