VICTORIA GRANTS COMMISSION ANNUAL REPORT 1983

Annual Report

of the

VICTORIA GRANTS COMMISSION

for the

Year ended 31 August 1983

Ordered by the Legislative Assembly to be printed

MELBOURNE F D ATKINSON GOVERNMENT PRINTER 1983

No.ll9 VICTORIA GRANTS COMMISSION ANNUAL REPORT 1983

The Hon. F N Wilkes. MP. Minister for Local Government, 480 Col/ins Street, . VIC 3000. As Members appointed under section 3 of the Victoria Grants Commission Act 1976, we have the honour to present the seventh 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

F.M. THOMAS Secretary

November, 1983

68707/83

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 F. M. Thomas, B.Ec. (Hons).

TABLE OF CONTENTS Page No. INTRODUCTION ...... vii CHAPTER I. THE YEAR'S ACTIVITIES ...... I Inspections ...... I Annual Return oflnformation ...... 2 Submissions ...... 3 Comparisons between Years ...... 3 Conference of State Grants Commissions ...... 5 Federal Government Policies ...... 5 Visit of Commonwealth Grants Commission ...... 5 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 ...... 15 Acknowledgements ...... 16 APPENDICES I Transmittal Memorandum and Determinations ...... 17 II Municipalities Insl?ected ...... 24 Ill Categories of Mumcipalities ...... 25 IV Formulae ...... 27 V Distribution of Rateable Property, Rate Income, Rating and Population 1975-76 to 1981-82 ...... 32 VI Tax Sharing Funds for Local Government Authorities 1974-75 to 1983-84 ...... 33

V

INTRODUCTION The primary role of the Commission is to determine the allocation to munici­ palities in Victoria of grants from the Commonwealth to the State for local govern­ ment authorities under the provisions of the Commonwealth's Local Government (Personal Income Tax Sharing) Act 1976. The Victoria Grants Commission Act 1976 was proclaimed on 9 February 1977 and the Commission, consisting of a full-time Chairman and two part-time Members, was formally constituted on 24 May 1977. By notification in the Commonwealth Gazette of 30 June 1978, the Victoria Grants Commission was formally declared the body to be the Local Government Grants Commission of the State of Victoria, in accordance with section 4 of the Local Government (Personal Income Tax Sharing) Act 1976. Mr. S. L. Cooper retired from the O~mmission on 31 October 1982, after serving as a member since its inception in May 1977. His service with the Commission followed lenghty service as a Councillor with the , including three terms as Shire President Mr. Cooper's wide knowledge of local government and extensive experience in local and community affairs was of very great benefit to the Commission. The Hon. J. M. Walton was appointed to succeed Mr. Cooper, for a three year term commencing 1 November 1982. The Hon. J. M. Walton was member of Parlia­ ment for Melbourne North Province in the Victorian Legislative Council for twenty­ four years and spokesman for the then Opposition on Local Government, Planning, Water Supply. Forests and State Development and Decentralisation. He was also a Councillor with the City of Brunswick for six years and served a further six years as Councillor with the City of Coburg. Section 12 of the Victoria Grants Commission Act 1976 requires the Commission. on or before 31 August each year, to determine the amount of~eneral revenue grants to be allocated to each municipality in that year. The Commission's determination for the 1983-84 financial year was transmitted to the Minister for Local Government on 19 August 1983. A copy of the transmittal memorandum and of the Determina­ tion 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 31 August This Report is in compliance with that requirement

vii

Chapter I 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 of general revenue grants from the Commonwealth to the State for local government authorities under the provisions of the Commonwealth's Local Government (Personal Income Tax Sharing) Act 1976 and under the Victoria Grants Commission Act 1976 which complements it To assist the Commission in this role, the Victoria Grants Commission Act provides that: "10. (1) Each municipality shall supply the prescribed information to the Commission- (a) on or before the day fixed by the Commission by notice published in the Government Gazette; or (b) in the case of a particular municipality on or before such later date as is fixed by the Commission for that municipality. (2) Where a municipality has not complied with sub-section (1) the Commission shall nevertheless allocate to the municipality its 'As­ of- Right Entitlement'." The Act also provides that "13. The Commission or any member thereof may carry out such inspec­ tion, 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 1983, nor in any previous year. 1.4 The Commission was convened on one hundred and one days during the year ended 31 August 1983 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 1983-84 financial year.

INSPECTIONS 1.5 Inspections were undertaken of forty-four municipalities throughout the State during 1982-83; this corn pleted the second round of a five-year programme of inspecting each municipality. In addition the Commission visited the Bright and Mansfield Shires early in July in order to evaluate the impact of visitors to the major ski resorts on the operations of the two municipalities. 1.6 The aim of the inspections is to covert he 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 it') 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 Commis­ sion 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 pro~ramming as a result of the shift to a five-year framework has enabled the Commiss10n 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.

ANNUAL RETURN OF INFORMATION 1.9 As indicated in paragraph 1.1, section I 0 of the Victoria Grants Commission Act 1976 authorises the Commission to require each municipality to provide pres­ cribed information on or before a date fixed by the Commission. In conformity with that section, 6 December 1982 was the date fixed by notice in the Victoria Government Gazette No. 102 of 13 October 1982, as the date by which the prescribed information for the financial year ended 30 September 1982 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 ofthe Commission and the Bureau. The Return has been devised to conform with the standardised form of recording local government financial statistics and the introduction of the new regulations for local government accounting, which is also aligned to that format, is expected to increase the accuracy oflocal government statistics and to substantially simplify the task of completing the Returns. The benefits of the joint Return, in terms of time-saving and quality of data, have accrued not only to the Commission and the Bureau but also to local government and other users. The Bureau's publication 'Local Government Finance- Victoria; which is derived from the joint Return, 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 where municipalities have adopted the revised format for the annual statement of accounts. The compulsory use of the new format for the 1982-83 Statement of Accounts will, we believe, provide a much more informative document for Councillors and the public generally as well as a much improved standard of financial reporting for the Commission's purposes. The new form of the Statement of Accounts will be incorporated in the Return of Information for the 1982-83 financial year; this should substantially simplify the compilation of inform­ ation for the Return. 1.12 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 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.

2 1.13 The Commission has previously referred to the benefit that can accrue from reducing delays in the processing of information vrhich is essential to the allocation process. The date of payment of the grants is largely determined by the 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. l.l4 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 wtthin a reasonable time or in a satisfactory manner were ignored. Rather than impede the allocation process at the expense of all other municipalities, it was decided to proceed with the programming of the Commission's data bank with incomplete or inadequate information for the relevant municipalities. The Com­ mission takes no responsibility for deficiencies in allocations for these municipalities which may have resulted from failure on their part to co-operate in the prov1sion of essential information.

SUBMISSIONS l.l5 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 sub­ missions. 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 a part of the presentation ofitineraries, the Commission requires detailed summaries of significant features of the respective municipalities, parti­ cularly those in areas being inspected during the visit This provtdes 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, while underlie the allocations. However, it is difficult to devise methodology 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 a~ainst the background of the considerable knowledge of local government that 1t 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 ofthe 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, 1981 and 1982 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 in the east and south of the inner metropolitan area; irrigated farmland also maintained the high 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 com­ mensurate increases in expenditure needs is a significant factor in allocations varying markedly 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 costs characteristics. (Similar considerations 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 exceeds general administration expenditure by a significant margin.< 0 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 con­ ditions 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 greater, the greater the emphasis is on roads expenditure in the municipality's activities. 1.22 The relatively small increase in funding for the 1983-84 allocations was. for some municipalities, insufficient to fully absorb shifts in relative revenue­ raising capacity and/or relative costs of services. This resulted in the Commission's determining allocations for a number of municipalities for 1983-84 which in some instances are less than or not significantly greater than allocations for 1982-83. 1.23 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. A<> 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

(I )See, for example. Table6 "Ordinary Services; Current Outlay"' in "Local Government Finance, Victoria 1980-1981", Australian Bureau of Statistics. Victorian Office: Catalogue Number 5501.2.

4 individual municipalities, from year to year, the amounts ~hown in the schedule of the Attachment; should first be deducted from the total allocations for the relevant municipalities. 1.24 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. 1.25 It is apparent that some of the criticism of the allocations arises from a continued lack 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.

OTHER MATTERS CONFERENCE OF STATE GRANTS COMMISSIONS 1.26 Representatives of the Grants Commissions of the six States met in Tanunda, South , on 14-15 October 1982 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, which have the support of the Local Government Ministers' Conference, are held annually in each State on a rotational basis. (The 1983 Conference was held in Melbourne on 15-16 September 1983). 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 equalistion methodologies.

FEDERAL GOVERNMENT POLICIES 1.27 With the change in government following the 1983 federal elections, responsibility for the administration of the Local Government (Personal Income Tax Sharing) Act 1976 was vested in the new ministry for Territories and Local Government The Minister, the Hon. Tom Uren, M.P., has indicated the government's commitment to maintain a level ofgeneral revenue funding to at least the equivalent of2 percent ofpersonal income tax collections. The amount available for allocation for 1983-84 was maintained at this level. 1.28 An undertaking has also been given by the Minister that the role of the State Grants Commissions of recommending the allocations to individual muni­ cipalities in the respective States would be maintained. 1.29 In a statement issued following the 1983 Federal Budget, the Minister indicated that "the Government has also decided to appoint an independent Committee to review local government financing with particular attention to the distribution and uses of tax sharing grants. The terms of reference and membership of the Committee will soon be announced. The Committee will report, in the light of any deficiencies and the government's objectives, on amendments that may be required to the Local Government(Personal Income Tax Sharing) Act 1976." Atthe time of writing this Report no announcement had been made about the composition of the Committee or its terms of reference.

VISIT BY COMMONWEALTH GRANTS COMMISSION 1.30 At the request of the Commonwealth Grants Commission, arrangements were made for that Commission to inspect a number of municipalities in the

5 Melbourne Metropolitan area during the period 18-22 Aprill983. These inspections were connected with the inquiry which the Commonwealth Grants Commission was undertaking into the finances of the Australian Capital Territory. The metropolitan areas of Melbourne and Sydney were being used as the standards against which the municipal services provided in the AC.T. were compared and it was felt that it would be highly desirable for the parties to the inquiry to inspect comparable facilities and services in the two "standard" States.

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 apJ?ly. 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 197 5-76 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 L7 5 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 ofthe Parliament The same propor­ tion 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 govern­ ment authorities in 1983-84 was $459,335,458, an increase of8.21 per cent over the amount for 1982-83. The apportionment to the six States is set out in the Common­ wealth 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 1983-84 are shown below:

Percentage Amount($) New South Wales 36.4977 167,646,877 Victoria 25.4513 116,906,845 Queensland 16.8606 77,446,714 8.6010 39,507,443 Western Australia 9.3897 43,130,222 Tasmania 3.1997 14,697,357 100.0000 459,335,458

2.3 The total ofgeneral revenue funds made available by the Commonwealth for allocation to local government since the first general revenue grants were made in 1974-75 is $2,378 m.; of this total amount Victoria has received $605 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, taking into account differences in the capacities of local authorities to raise 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 whtch provides that each municipality in the State shall receive an entitlement "as-of-right' in accordance with (i) above and that no municipality

7 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, recom­ mended thattheAs-of-Rightcomponent be40 percent 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 and, because the Commission can see no justification for any change at this stage, it has not sought to have the basis changed. For the 1983-84 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 and 1982" (Catalogue Number 3201.2.) 2.7 The As-of-Right entitlement factors for the 1983-84 allocations are: Population $9.951984 per head Area $30.886791 per square kilometre As for 1982-83, the allocations for the Shires ofPyalong and Rosedale 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 larger 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 oftheAs-of-Right entitlement and would result in significant double counting. As indicated in the 1977 Annual Report (see paragraphs 2.6 and 2.7) the Commission's approach is to follow the procedures laid down in the Victoria Grants Commh~~ion 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 allowance 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 "•elow the standards of other municipalities in the State. The term "so far as is rracticable" recognises two things: (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 8 (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 oflow 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 ofCouncils. I fit 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 ofCouncils because of the way by which it determined the allocations, it could become, in effect the principal determinant of revenue-raising and expendi­ ture 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 circum­ stances 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 bench march or standard against whi~:h the capacity of other municipalities 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 municipality may have high costs of municipal services because of the character­ istics of the municipality but at the same time, have a relative advantage in raising

9

68707/83-2 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 capacity 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 com­ parisons 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 ofthese bases to the measurement of relative revenue-raising capacity, particularly because ofthe 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 pro{'erty types should be recognised. Thus, the Commission separately measures capac1ty 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 mumcipality. 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 municipaliues 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 residential property numbers where these numbers are inflated by a large number ofundeveloped properties. The proportions of residential dwellings to total residential

10 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 of the 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 Appendix IV for further details). Regard was also had to revenue needs measured in relation to per head values of rateable property, the calculations being made on the same basis as for previous years. 2.20 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 disparate 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 eqU1ty that are the corner stone of the general revenue arrangements. For this reason the Commission has commenced an examination of the '"balanced budget method" for the assess­ ment 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. 2.21 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. 2.22 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 com­ ment 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 2.23 Allowances for differences in the cost of local government services is the second element of the fiscal equalisation equation. Expenditure by a municipality 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 characteristics of each ofthe·municipalities. 2.24 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

11 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 impor­ tance that the Commission attaches to the detailed inspections of each municipality. 2.25 The expenditure component of the allocations is the summation of assess­ ments 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 2.34 along with the subdivisions for each classification which were considered in detail. 2.26 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 allowance to be made. 2.27 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 example, a municipality may have a relatively high proportion of elderly persons in 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 municipality 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. 2.28 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 character­ istics 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. 2.29 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 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. 2.30 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 until 1980-81, 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 1983-84 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

12 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. 2.31 "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 numberoflanguages. Library costs may also be higher because of the need to carry multi-lingual book stocks in areas with high concen­ trations of non-English-speaking people or to provide a larger range of large print books where the proportion ofelderly 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). 2.32 The derivations ofdisability 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 ofinherent 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. 2.33 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. 2.34 The Commission derived unit costs from the expenditure data supplied in the Return of Accounting and General Information for the financial year ended 30 September 1982. The following parameters were used: General Administration Growth and Planning- average rate of population growth overpastfive 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.

13

68707183-3 Weljare 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, based on a population density criterion). 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 com­ ponents 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. Special Factors Natural Disasters- net cost to Council ofapproved repair and restoration works. 2.35 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 2.30 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 avail­ ability 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

14 grants for particular services. The total allowance for each function for differences in the cost of services is the sum of the net needs allowance and the net disabilities allowance. DETERMINING THE INDIVIDUAL ALLOCATIONS 2.36 The total fiscal equalisation allowance for a municipality is the sum­ mation of the allowances for revenue-raising capacity (plus or minus) and the net expenditure allowances (plus or minus) for the range of municipal functions. The sum of the total allowances for the 211 municipalities, 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 there­ fore 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 municipalities. 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 foregoing discounting procedure. Therefore the amount available for purposes of the discounting 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. 2.37 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 of better 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 municipality 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, subjectto the qualifications about variations in road works, valuations and development activity outlined in paragraphs 1.16 to 1.21. 2.38 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. 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 backgroud profile of each municipality. NATURAL DISASTERS 2.39 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, afterraising the issues with conferences oflocal govenrment representatives throughout the State. This arose from actions taken or

15 proposed to be taken by some Councils following the February 1977 bushfires in the Western District, the October 1977 hail storm in the area and the February 1978 fires in the Bairnsdale area. (See paragraphs 2.35 to 2.41, Victoria Grants Commission Annual Report 1978.) 2.40 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 ofdocumentary 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. 2.41 The allocations for 1983-84 include a total of $829,845 for special factors. This is the largest amount the Commission has had to set aside to compensate Councils for recognised costs incurred in relation to natural disasters and, in large part, reflects the extent of damage to municipal assets arising out of widespread flooding over the State during the 1981-82 year. The financial effects of the 1983 bushfires will be reflected in the 1984-85 allocations. which will take into account the net cost of restoring municipal assets damaged by the fires and the temporary reduction in revenue raising capacity because of the destruction of improvements on private property. ACKNOWLEDGEMENTS 2.42 The quality and 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. 2.43 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. 2.44 We wish also to record our appreciation for the help of the Local Govern­ ment Department throughout the year, especially the Valuer-General's Office which has supplied us with much detailed information about valuation changes through­ out the State. 2.45 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.

Detennination ofAllocations of General Revenue Assistance to Municipal Councils in 1983-84

We have pleasure in submitting to you the Determination of allocations of general revenue grants to municipal Councils in Victoria for the 1983-84 financial year. Victoria's share of general revenue grants for local government for 1983-84. being made available under the Commonwealth Local Government(Personal Income Tax Sharing) Act 1976, is$116,906,845 an increase of8.21 percent on the State's share for 1982-83. 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 1981-82 financial year. Allowances for the financial effects of these special factors amount to $829.845 and are listed in the attachment to this Determination along with the special factor allowances included in the 1982-83 grants. The effects of the bushfires and other natural disasters which occurred in the current (1982-83) financial year will be taken into account when the allocations for 1984-85 are being considered. The allocation for each municipality is not less than its entitlement as-of-right The basis for calculating the as-of-right entitlements, which was laid down by the Government when the State first became responsible for determining the distri­ bution of the general revenue grants in 1976. is as follows:

forty per cent of the total amount for the State, eighty-five per cent of which is allocated on a population basis and fifteen per cent on an area basis. The relevant figures for calculating the 1983-84 as-of-right entitlements are: Population $ 9.951984 per head Area $30.886791 per square kilometre. The allocations for two municipalities. the Shires of Pyalong and Rosedale. were determined by reference to their respective entitlements as-of-right Inspections were undertaken of a further forty-four municipalities throughout the State since the last allocations were announced; this completed the second round of a five-year programme of inspecting each municipality. In addition the Commission visited the Bright and Mansfield Shires late in June in order to evaluate the impact of visitors to the major ski resorts on the operations of the two municipalities.

Mention has been made in our Reports of the volatile nature of a number of elements which are used in determining the allocations for each of the 211 municipalities. Of particular importance are the amounts of expenditure on roadworks

17 and/or the relative costs of such works. Variations in these factors from year to year can significantly affect the allocations for individual municipalities, especially the smaller rural municipalities whose expenditures are heavily dominated by roadworks. Such variations have been quite apparent in the data for the 1981-82 financial year upon which the allocations now determined for 1983-84 are based. Coupled with the relatively small increase in funding for this year's allocations, these variations have led us to determine allocations which in some instances are less than or are not significantly greater than those for 1982-83. It is also apparent that flood repair and restoration works have substituted for normal municipal expenditure on roadworks to some extent. However the cost of approved repair and restoration works is met in full through the combination of the Commonwealth/ State natural disaster funding arrangements and the special factor allowances included in the relevant grants. Other factors that have been important in establishing the allocations for 1983- 84 are the increased costs of public lighting, increases in statutory contributions to the Metropolitan Fire Brigade and the increased costs of garbage collection and disposal in many metropolitan areas. The relative strength of property values in bayside and inner eastern metropolitan areas compared with other areas was maintained during the review period as were values for irrigated farmland and these values continue to be reflected in the allocations for municipalities in relevant areas through enhanced capacity to raise revenue. Finally, the improvement in data presentation which is becoming evident with the adoption of the revised municipal accounting regulations, has enabled the Commission to develop further its examination of income-raising and expenditure patterns with a view to improving the equity of the allocations. We are confident that the requirement that all municipalities prepare their Statements of Accounts for 1982-83 in the new format \vill provide not only a much more informative document for Councillors and the public generally, but also much better financial information for our purposes. We remain indebted to the Councillors and staff of all municipalities for the assistance given to the Commission throughout the year, especially to those repre­ senting 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 acknowledged as is the help given by the Government Computing Service in processing this information. We also acknowledge the support ofthe Department of Local Government, particularly the Valuer-General's Office which has provided us with much detailed information aboutvaluations 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

F. M. THOMAS Secretary

19 August 1983.

18 APPENDIX 1 - continued VICTORIA GRANTS COMMISSION

DETERMINATION OF ALLOCATIONS OF GENERAL REVENUE GRANTS TO MUNICIPAL COUNCILS IN VICTORIA -1983-84 FINANCIAL YEAR

Municipality $ Municipality $ Alberton (S) ...... 485,000 Colac (S) ...... 414,000 Alexandra (S) ...... 294,000 Collingwood (C) ...... 635,000 Altona (C) ...... 592J 15 Corio (S) ...... 1,080,000 Arapiles (S) ...... 159,100 Cranboume (S) ...... 890,000 Ararat (C) ...... 453.000 Creswick (S) ...... 288,000 Ararat (S) ...... 458,000 Croydon (C) ...... 912,000 Avoca (S) ...... 240,000 Dandenong (C) ...... l,l75,000 Avon (S) ...... 242.000 Day1esford & Glenlyon (S) ... 412.000 Bacchus Marsh (S) ...... 324,000 Deakin (S) ...... 523,000 Bairnsdale (T) ...... 460,000 Diamond Valley (S) ...... l,l50,000 Bairnsdale (S) ...... 386,000 Dimboo1a (S) ...... 382,600 Ballaarat(C) ...... l,398.000 Dona1d(S) ...... 217,000 Ballan (S) ...... 179.000 Doncaster & Tstowe (C) . . . 1,385,000 Ballarat (S) ...... 695.000 Dundas (S) ...... 245,000 Bannockburn (S) ...... 157,000 Dunmunkle (S) ...... 293.200 Barraboo1 (S) ...... 210,000 Eaglehawk (B) ...... 328,000 Bass (S) ...... 316,000 East Loddon (S) ...... 160,600 Beechworth (S) ...... 315.000 Echuca (C) ...... 342,000 Belfast (S) ...... 128.000 E1tham (S) ...... 932,000 Bellarine (S) ...... 908,000 Essendon (C) ...... 1,262,000 Benalla (C) ...... 359,000 Euroa (S) ...... 264,000 Benalla (S) ...... 192,900 Fitzroy(C) ...... 702,000 (C) ...... l,307,830 Hinders (S) ...... 590,000 Berwick (C) ...... 925,000 Footscray (C) ...... 1,764,000 Bet Bet (S) ...... 215,400 Frankston (C) ...... 1.505,000 Birchip (S) ...... 148,600 (C) ...... 490.000 Box Hill (C) ...... 925,000 Geelong West (C) ...... 465,000 Bright (S) ...... 394,000 Gisbome (S) ...... 248,000 Brighton (C) ...... 410,000 Glenelg (S) ...... 432.000 Broadford (S) ...... 142,000 Gordon (S) ...... 274,000 Broadmeadows (C) ...... 2.476,000 Gou1burn (S) ...... 140,000 Brunswick (C) ...... 1,215,000 Grenville (S) ...... 222,000 Bulla (S) ...... 462,000 Hamilton (C) ...... 487.000 Buln Buln (S) ...... 520,000 Hampden (S) ...... 468.000 Bungaree(S) ...... 168,000 Hastings(S) ...... 311,000 Buninyong (S) ...... 436,000 Hawthorn (C) ...... 437.000 Camberwell (C) ...... 1,260,000 Healesville (S) ...... 482,000 Camperdown (T) ...... 186,000 Heidelberg (C) ...... 1,460,000 Castlemaine (C) ...... 414,000 Heytesbury (S) ...... 615,000 Caulfield (C) ...... 1,190,000 Horsham (C) ...... 606,000 Charlton (S) ...... 202.000 Huntly (S) ...... 184,200 Chelsea (C) ...... 920,000 Kaniva (S) ...... 204.000 Chiltern (S) ...... 120,000 Kara Kara (S) ...... 153,000 Cobram (S) ...... 398,000 Karkarooc (S) ...... 384,200 Coburg (C) ...... 1,400,000 Keilor (C) ...... 1,930,000 Cohuna (S) ...... 268,000 Kerang (B) ...... 213,000 Co1ac (C) ...... 383.000 Kerang (S) ...... 406,000

19 APPENDIX I -continued

Municipality $ Municipality $ Kew (C) ...... 436,000 Portland (T) ...... 486.000 Kilmore (S) ...... 238,000 Portland (S) ...... 592,000 Knox (C) ...... 1,620,000 Port Melbourne (C) ...... 230.000 Koroit (B) ...... 62,000 Prahran (C) ...... 770.000 Korong (S) ...... 370,000 Preston (C) ...... 1.730,000 Korumburra (S) ...... 455,000 Pyalong (S) ...... 30,600 Kowree (S) ...... 340,000 Queenscliffe (B) ...... 130,000 Kyabram (T) ...... 271.500 Richmond (C) ...... 670,000 Kyneton (S) ...... 376,000 Ringwood (C) ...... 772,000 Leigh (S) ...... 132,000 Ripon (S) ...... 244,000 Lexton (S) ...... 80.000 Rochester (S) ...... 573,000 Lillydale (S) ...... I ,415.000 Rodney (S) ...... 660,000 Lowan (S) ...... 273,000 Romsey (S) ...... 179.000 Mclvor (S) ...... 167,400 Roseda1e (S) ...... 137.000 Maffra (S) ...... 535,000 Rutherglen (S) ...... 192.000 Maldon (S) ...... 167,000 St Arnaud (T) ...... 198,000 Malvern (C) ...... 656,000 St Kilda (C) ...... 1,140,000 Mansfield (S) ...... 370,000 Sale (C) ...... 612.000 Marong (S) ...... 404,100 Sandringham (C) ...... 497.300 Maryborough (C) ...... 370,000 Sebastopol (B) ...... 282,000 Melbourne (C) ...... 2,070,000 Seymour (S) ...... 445,000 Melton (S) ...... 660,000 Shepparton (C) ...... 778,000 Metcalfe (S) ...... 143,000 Shepparton (S) ...... 476,000 Mi1dura (C) ...... 656,000 Sherbrooke (S) ...... 1,005,000 Mildura (S) ...... 1.020,000 South Barwon (C) ...... 996,000 Minhamite (S) ...... 236,000 South Gippsland (S) ...... 434,000 Mirboo (S) ...... 135,000 South Melbourne (C) ...... 350,000 Moe (C) ...... 695,000 Springvale (C) ...... 1,355,000 Moorabbin (C) ...... 1,095,000 Stawell (T) ...... 345.000 Mordialloc (C) ...... 648.000 Stawell (S) ...... • . . 296,000 Mornington (S) ...... 495.000 Strathfieldsaye (S) ...... 418.000 Mort1ake (S) ...... 244,000 Sunshine (C) ...... 2,438.000 Morwel1 (S) ...... 1,050,000 Swan Hill (C) ...... 429,700 Mount Rouse (S) ...... 167,000 Swan Hill (S) ...... 789.000 Myrtleford (S) ...... 288,700 Ta1bot & Clunes (S) ...... 182,000 Narracan (S) ...... 601,000 Tallangatta (S) ...... 368,000 Natha1ia (S) ...... 267.000 Tambo (S) ...... 534,000 Newham & Woodend (S) ... 174.000 Traralgon (C) ...... 768,000 Newstead (S) ...... 140,000 Traralgon (S) ...... 115.000 Newtown (C) ...... 309,000 Tullaroop (S) ...... 138,000 Northcote (C) ...... 1,445,000 Tungamah (S) ...... 260,600 Numurkah (S) ...... 395,500 Upper Murray (S) ...... 246,000 Nunawading (C) ...... 1,417,000 Upper Yarra (S) ...... 432,000 Oakleigh (C) ...... 920,000 Violet Town (S) ...... 137,000 Omeo (S) ...... 232.000 Walpeup (S) ...... 409,000 Orbost (S) ...... 538,000 Wangaratta (C) ...... 658,000 Otway (S) ...... 455,000 Wangaratta (S) ...... 122,500 Oxley (S) ...... 305,700 Wannon (S) ...... 298,000 Pakenham (S) ...... 670,000 Waranga (S) ...... 437.700 Phillip Island (S) ...... 335.000 Warracknabeal (S) ...... 292.600 Port Fairy (B) ...... 165,000 Warragul (S) ...... 386.000

20 APPENDIX I- continued

A1unicipality $ Warrnambool (C) ...... 911,000 Warrnambool (S) ...... 436,000 Waverley (C) ...... 1,405,000 Werribee (S) ...... \,237.000 Whittlesea (S) ...... 1,345,000 Williamstown (C) ...... 942,000 ( S) ...... 294,000 Winchelsea (S) ...... 356.000 Wodonga (C) ...... 760,000 Wonthaggi (B) ...... 373,000 Woorayl (S) ...... 620,000 Wycheproof(S) ...... 419,000 Yackandandah (S) ...... 208,300 Yarrawonga (S) ...... 296,900 Yea ( S) ...... 230.000 TOTAL $116,906,845

D. V. MOYE, Chairman

L. F. CHEFFERS, Member

J. M. WALTON, Member

19 August, 1983

21 APPENDIX I -continued VICTORIA GRANTS COMMISSION GENERAL REVENUE GRANTS TO MUNICIPALffiES IN VICTORIA

AMOUNTS INCLUDED IN ALLOCATIONS FOR SPECIAL FACTORS 1982-83 AND 1983-84 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 intergovernment natural disaster assistance arrangements. 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 1982-83 1983-84 Altona (C) ...... Nil 22,115 Arapiles ( S) ...... 12,000 13,100 Ararat (S) ...... 19,000 Nil Beechworth (S) ...... Nil 19,000 Bellarine (S) ...... 11,000 Nil Benalla (S) ...... Nil 7,900 Bendigo (C) ...... Nil 16,830 Bet Bet (S) ...... Nil 13,400 Birchip (S) ...... Nil 2,600 Bright(S) ...... Nil 14,000

Charlton (S) ...... Nil 60.000 Chiltern (S) ...... 14,000 Nil Cobram (S) Nil 28,000 Deakin (S) ...... 7,000 28,000 (S) ...... 11,282 3,600 Dunmunkle (S) ...... Nil 18,200

East Loddon (S) ...... 32,000 600

Gordon (S) ...... 29,000 2,000

Huntly (S) ...... Nil 25,200

Kaniva (S) ...... 12,000 6,000 Kara Kara (S) ...... 12,000 23.000 Karkarooc (S) ...... 11,000 6,200 Kerang (S) ...... Nil 35,000 Korong (S) ...... Nil 6,000 Kowree (S) ...... 9,000 10,000 Kyabram(n ...... Nil 19.500 Kyneton (S) ...... 1,000 Nil Lowan (S) 22,000 10.000

22 APPENDIX I -continued

Amount included for Special Factors $ $ Municipality Natural Disasters Natural Disasters 1982-83 1983-84 -~------·------··------·----·-- Mclvor (S) ...... Nil 21,400 Marong(S) ...... Nil 24,100 Metcalfe (S) ...... 17,000 Nil Mortlake (S) ...... 7,000 Nil Myrtleford (S) ...... Nil 15,700 Nathalia (S) ...... 1,000 15,000 Newstead (S) ...... lO.OOO Nil Numurkah (S) ...... Nil 9,500 Omeo (S) ...... 7,000 Nil Orbost (S) ...... 17,000 Nil Oxley (S) ...... Nil 25.700 Pyalong (S) ...... 1.000 5,600 Rochester (S) ...... Nil 35,000 Rodney (S) ...... 5,000 30,000 Rutherglen (S) ...... 21,000 14,000 Sandringham (C) ...... 6,000 17,300 Shepparton (S) ...... 21.000 14,000 Stawell (S) ...... Nil 34,000 Swan Hill (C) ...... 15,000 7,700 Swan Hill (S) ...... 16,000 19,000 Tallangatta (S) ...... Nil 18,000 Tungamah (S) ...... Nil 12,600 Violet Town (S) ...... Nil 35,000 Wangaratta (C) ...... 10,000 Nil Wangaratta (S) ...... 30.000 2,500 Waranga (S) ...... Nil 29,700 Warracknabeal (S) ...... Nil 11,600 Wimmera (S) ...... Nil 24.000 Woorayl(S) ...... 5,000 Nil Yackandandah (S) ...... 12,000 3JOO Yarrawonga (S) ...... Nil 14.900

23 APPENDIXII MUNICIPALITIES INSPECTED 1982-83 Date 1982 9 November 10 November Shire of Mildura 11 November 23 November Shire ofWalpeup 24 November Shire of Karkarooc 25 November 7 December...... Shire of Kaniva 8 December...... 9 December ...... 1983 25 Januarv...... Shire ofWarrnambool 26 January...... City ofWarrnambool 27 January...... 8 February...... 9 February...... 10 February...... Shire ofWannon 15 February ...... City ofSpringvale 16 February ...... City of Oakleigh 17 February ...... City ofMoorabbin I March ...... Shire of Minhamite 2 March ...... 3 March ...... 4 March ...... 16 March ...... 17 March ...... 22 March ...... City of Doncaster & Templestowe 23 March ...... City of Nunawading 24 March ...... City ofWaverley 12 April ...... 13 April ...... Shire of Stralhfieldsaye 14 April ...... 3 May ...... Shire of Dundas 4 May ...... City of Hamilton 5 May ...... 10 May...... City ofColac ll May ...... 12 May ...... 24 May ...... Shire of Buln Buln 25 May...... Shire ofWarragul 26 May ...... 31 May ...... Shire of Lexton l June ...... 2 June ...... 7 June ...... City of Kew 8 June...... City of Richmond 9 June ...... City of Hawthorn 5 July ...... 6 July ...... Shire of Bright 7 July ...... Shire of Mansfield

24 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 City Caulfield City Frankston City Nunawading City Springva\e City Chelsea City Hawthorn Citv Oakleigh City Sunshine City Coburg City Heidelberg City Port Melbourne City W averley 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 Gee long 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 W angaratta City Camperdown Town Kerang Borough St. Arnaud Town Warrnambool City Castlemaine City Kyabram Town Sale City Wodonga City Colac City Marybotough 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 (112 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 Mcivor Shire Benalla Shire Deakin Shire Huntly Shire Maffra Shire

25 APPENDIX Ill - continued

CATEGORY 4 (112 Councils)- continued Maldon Shire Numurkah Shire Shepparton Shire Walpeup Shire Mansfield Shire Omeo Shire Wangaratta Shire Marong Shire Orbost Shire Stawell Shire Wannon Shire Metcalfe Shire Otway Shire Swan Hill Shire Waranga Shire Minhamite Shire Oxley Shire Tal bot & 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 Murray Shire Yakandandah Shire Newham & Woodend Rosedale Shire Upper Yarra Shire Yarrawonga Shire Shire Rutherglen Shire Violet Town Shire Yea Shire Newstead Shire

26 APPENDIX IV FORMULAE GENERAL FORMULA Gc=R: + E" Where G grant

c relevant municipality (claimant) R revenue component E expenditure component The Revenue Component (R) for any municipality can be expressed as: R: Pc . ~ (T, - Tc) Where P population, number of assessments or other parameter t rate in$ (tax rate)

s standard T revenue or tax base (value of rateable property) per head, or assessment, or other parameter and the Expenditure Component (E) as Ec E,. & so that the general formula becomes: Gc Pc · t.(T, - TJ + 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 vaj~_ofia!eiJ:ble property of top 25 per cent . and ' total number of assessments in top 25 per cent ' total rates collected by top 2~er cent:-::---­ 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 total value of rateable property of top 25 per cent Cr = residential)

27 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 adjusting the assessment numbers for each municipality according 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: 1: residential assessments in State ··--~·---- RES)+ L all assessments in State

1: commer~al11n~ in'!ustrial assessments in State (= COM) + 1 all assessments m State

OTH) = l assessments

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 for that 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 ith municipality = L; assessment numbers. RES+ L; assessment numbers. COM + L; assessment numbers. OTH Then. _ L; value of residential property . T:r -I; assessment numbers:~RES · _ L; value of commercial and industrial property ; and Tee - L; assessment numbers. COM L; value of rural and other property Tco I; assessment numbers. OTH and R: = L; assessment numbers. RES . t" (T" - Tcr) + L; assessment numbers. COM. t,c (T".- TcJ +

L:; assessment numbers. OTH. t,0 (Tso- Tco) = I, assessment numbers . [RES . t,, (T, T",) + COM . l (T,c- T"J + OTH. t"' (Tso- Tw)]

28 APPENDIX IV- continued EXPENDITURE COMPONENT (E) = 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, (Kmc _Km,) A A. Where A municipality's number of assessments C, standard cost per kilometre Kmc = municipality's length of road responsibility per assessment A Km, standard length of road responsibility per assessment A. Road cost disabilities are calculated by the formula: ~.C,.g,

Where Kmc = municipality's total length of road responsibility in kilometres C, standard cost per kilometre g_. 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:

G~=A:.C, (Km" Km,) +Km".C,.g, A A. Where G~ =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.

29 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: G~ ~ [P, C(A){Z:-~)+P, C(A), & JD Where G~ = 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 ~ proportion of persons in municipality receiving pensions and Pc 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,. g) 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 If a 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 ofsenJice was standard) then its disability factor could be derived simply by:

g= Ec -I

Where g disability factor Ec municipality's expenditure per unit on the function E, standard expenditure per unit on the function (subtracting I from Ec reduces the factor to a fraction) E,

30 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 munic~pality. For this reason, the fixing ofdisability factors for each municipality is largely a matter of judgment based on the evidence available to the Commission and its knowledge of the circumstances of each municipality.

31 APPENDIX V

DISTRIBUTION OF RATEABLE PROPERTY, RATE INCOME, RATING AND POPULATION 1975-76 to 1981-82

1. The values of rateable property have been derived from Valuer General estimates of rateable property at the beginning of the local government financial year- I October. In this respect they differ from the figures used by the Common­ wealth 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 1981-82 have been derived from revised estimates of resident population (catalogue number 3201.2 dated 6 July 1983) 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) 30June $m $per head $m $per 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

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 ...... 296.9 737.00 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 51.9 126.14 12.6 411.440 ------·----···--- ~--~-----

32 APPENDIX V- continued Rateable Implied Year Property Rate Income Rate in Population (1 October- NAV $(cents) at 30 September) 30June $m $per head $m $ ALL OTHER MUNICIPALITIES - 1975-76 ...... 698.7 692.23 77.1 79.30 11.5 1,009,400 1976-n ...... 1911.5 966.86 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 ]J69,650 1981-82 ...... 1704.1 1426.30 166.7 139.53 9.8 1,194,770 TOTAL FOR STATE 1975-76 ...... 2654.8 709.39 257.0 71.92 10.1 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 1315.97 526.6 131.85 10.0 3,994,010 - NOTE: Statistics relating to the functional distribution of municipal expenditure will appear in detail in the Australian Bureau ofStatistics local government bulletins.

33 APPENDIX VI TAX SHARING FUNDS FOR LOCAL GOVERNMENT AUTHORITIES 1974-75 to 1983-84 ($'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 11,925 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) 167,647 116,907 77,447 39,507 43,130 14,697 459,335 TOTAL 869,076 605,248 401,388 204,275 223,014 75,221 2,378,219

--······ -----~------(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'. 1978-79 on, 'Payments to or for the States, the Northern Territory and Local Government Authorities 1983-84'.

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