VICTORIA GRANTS COMMISSION ANNUAL REPORT

1982 VICTORIA

Annual Report

of the

VICTORIA GRANTS COMMISSION

for the

Year ended 31 August 1982

Ordered by the Legislative Assembly to be printed

MELBOURNE F D ATKINSON GOVERNMENT PRINTER 1982 No. 42 VICTORIA GRANTS COMMISSION

ANNUAL REPORT

1982

The Hon. F. N. Wilkes, M.P., Minister for Local Government, 480 Collins Street, MELBOURNE. V/C. 3000. As Members appointed under section 3 of the Victoria Grants Commission Act 1976, we have the honour to present the sixth Annual Report of the Victoria Grants Commission, in accordance with section 17 of that Act.

D. V. MOYE, Chairman

L. F. CHEFFERS, Member

S. L. COOPER, Member

F. M. THOMAS Secretary

October, 1982

VICTORIA GRANTS COMMISSION

MEMBERS D. V. Moye, B.Ec., H.D.A. (Hons), Chairman L. F. Cheffers, L.G.E., M.l.E.Aust., F.I.M.A., M.B.S. S. L. Cooper, J.P.

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

TABLE OF CONTENTS Page No. INTRODUCTION ...... VII CHAPTER I. THE YEAR'S ACTIVITIES ...... Inspections ...... I Annual Return of Information ...... 2 Submissions ...... 3 Comparisons between Years ...... 3 Conference of State Grants Commissions ...... 5 Notification of State Allocations ...... 5 Other Matters ...... 6 2. THE BASES OF THE DETERMINATIONS ...... 7 As-of-Right Entitlement ...... 8 Equalisation ...... 8 Revenue Raising Needs ...... 9 Expenditure Needs and Disabilities ...... II Determining the Individual Allocations ...... 14 Natural Disasters ...... 15 Acknowledgements ...... 16

APPENDICES I Transmittal Memorandum and Determinations ...... 17 11 Municipalities Inspected 1981-82 ...... 25 III Categories of Municipalities ...... 26 IV Formulae ...... 28 V Distribution of Rateable Property, Rate Income, Rating and Population 1975-76 to 1980-81 ...... 33 VI Tax Sharing Funds for Local Government Authorities 1974-75 to 1982-83 ...... 35

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 gov­ ernment authorities under the provisions of the Commonwealth's Local Government (Persona/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 (Persona/Income Tax Sharing) Act 1976. Mr. D. V. Moye, whose appointment to the Commission expired on 24 May 1982, was reappointed as full-time Chairman of the Commission, a position he has held since the Commission's inception. Mr. Moye's term of office extends to 31 October 1986. Section 12 of the Victoria Grants Commission Act 1976 requires the Com­ mission, on or before 31 August each year, to determine the amount of general revenue grants to be allocated to each municipality in that year. The Commission's determination for the 1982-83 financial year was transmitted to the Minister for Local Government on 10 August 1982. A copy of the transmittal memorandum and of the Determination are included in Appendix I to this Report. Section 17 of the Act requires the Commission to report to the Minister by 30 November each year on the activities of the Commission during the preceding year ended 31 August. This Report is in compliance with that requirement.

54700/82-2 Vll

Chapter 1 THE YEAR'S ACTIVITIES 1.1 The primary role of the Victoria Grants Commission is to determine, on or before 3 I 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 (Per­ sona/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 pub­ lished 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 (I) the Commission shall nevertheless allocate to the municipality its ·As­ of-Right Entitlement'." The Act also provides that: '"13. The Commission or any member thereof may carry out such in­ spection, 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 Corn­ mission 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 significance 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 1982, nor in any previous year. 1.4 The Commission was formally convened on ninety-four days during the year ended 3 I August I 982 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 I 982-83 financial year.

INSPECTIONS 1.5 During the three-year period 1978-79 to 1980-81 the Commission visited each of the 21 I municipalities in the State for inspections and discussions about its role, spending a full day with each Council in most instances. 1.6 The three-year cycle of visits placed heavy demands on the members and staff which would have been difficult to sustain for a longer period; therefore it was decided to extend the next round of visits over a five-year period. In ac­ cordance with this decision, the Commission visited 43 municipalities throughout the State during 1981-82. Details of these visits are given in Appendix//.

1 1. 7 The visits take the form of inspections of the range of services being provided by the respective Councils, in order that the Commission might better appreciate the conditions which each Council faces in serving its community. A period is set aside at the end of each inspection for discussion with Councillors and their officers about the role of the Commission and about aspects of municipal functions which are relevant to that role. 1.8 These inspections and discussions have been invaluable to the Com­ mission 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 simply reflect policy decisions. 1. 9 The flexibility available in inspection programmes as a result of the shift to a five-year framework, will enable the Commission to devote more time to areas where special problems arise from time to time. During the 1981-82 year, the Commission felt it desirable to familiarise itself with developments in the Portland region, and to this end spent an extended period with representatives of the Port­ land Town and Portland Shire Councils.

ANNUAL RETURN OF INFORMATION 1.10 As indicated in paragraph 1.1, section 10 of the Victoria Grants Com­ mission Act 1976 authorises the Commission to require each municipality to pro­ vide prescribed information on or before a date fixed by the Commission. In conformity with that section, 7 December 1981 was the date fixed by notice in the Victoria Government Gazette No. 94 of 23 September 1981, as the date by which the prescribed information for the financial year ended 30 September 1981 should be returned to the Commission. 1.11 The Commission has worked closely with the Victorian office of the Australian Bureau of Statistics on the continuing development of the joint Return of statistical and other information which serves the needs of the Commission and the Bureau. The Return has been devised to conform with the standardised form of recording local government financial statistics and the introduction of the new regulations for local government accounting, which is also aligned to that format, is expected to increase the accuracy of local government statistics and to sub­ stantially 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. 1.12 A major problem faced by the Commission for some time, to which it has referred in previous reports, relates to the difficulties it has encountered in obtaining counts of property or assessment numbers for each municipality that are based on reliable and uniform definitions. In an attempt to overcome the prob­ lem the Commission this year required each municipality to complete a Supple­ mentary Return ofValuations and Assessments. The date fixed by notice in the Victoria Government Gazette No. 117 of 2 December 1981 as the date by which the Supplementary Return should be returned to the Commission was 19 February 1982. 1.13 The Commission has previously referred to the benefit that can accrue from reducing delays in the processing of information which is essential to the allocation process. The date of payment of the grants is largely determined by the date by which the allocations are finalised, once the total for the State is known.

2 With the amount of money now involved, there should be an obvious financial incentive for all Councils to ensure that their staff are not responsible for any undue delays to the Commission's work which might hinder the early completion of the determination. 1.14. The majority of municipalities lodged their Returns on or about the due date, but there was again a disappointing number which failed to do so without reasonable excuse. A few of these ignored repeated efforts by Commission staff to have them provide the required information within a reasonable time or in a satisfactory manner. The point was reached where further delay threatened to impede the allocation process through the unavailablity of analytical data. There­ fore the Commission decided to proceed with the programming of its data bank with incomplete or inadequate information for several municipalities. The Com­ mission takes no responsibility for deficiencies in allocations to the relevant municipalities which may have resulted from the failure on their part to co-operate in the provision of essential information.

SUBMISSIONS 1.15 The Commission has not required Councils to make formal submissions each year. It has copies of detailed submissions made to the Commonwealth Grants Commission prior to 1977 and summaries of the salient points made in these sub­ missions. In most cases annual submissions would simply be repeating points made in previous years and therefore would serve little purpose. However, the Com­ mission 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 sub­ missions. Also, as a part of the presentation of itineraries, the Commission requests detailed summaries of significant features of the respective municipalities, par­ ticularly those in areas being inspected during the visit. This provides a further opportunity to update information on various aspects of each municipality.

COMPARISONS BETWEEN YEARS 1.16 The continued upgrading of financial data and other information about the 211 municipalities has assisted in the development of more precise statistical measurements of fiscal need, which underlie the allocations. However, it is difficult to devise 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 against the background of the considerable knowledge of local government that it has accumulated during the past five years. 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 re­ flected 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 munici­ pality for any year from the allocations determined for prior years. 1.17 In addition, as has been emphasised by the Commission in past years, the volatile nature of some of the elements upon which the allocations are based further complicates any comparison of allocations between years. The legislation prescribes two principal elements that have to be considered in the allocation process capacity to raise revenue and relative costs of services. A number of the com­ ponent 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 cov­ ering the 1980 and 1981 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, while in rural areas land used predominantly for cattle grazing and for dairying also showed strong increases in values. 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 off­ setting increases in expenditure needs. Substantial increases in valuations without commensurate 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. 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.(!) In these situations allowances for roadworks will dominate allowances in the expenditure component of the allocations and thus will have a significant effect on the level of allocations for individual municipalities. Where there are disparities in cost conditions for roadworks within a municipality and these are reflected in differ­ ences 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 For the 1982-83 allocations the Commission used the estimated resident population in local government areas, derived from the 1981 Census. This is a departure from previous years where population counts were estimated from the counts of where persons were on the night of the Census. This change to the basis for population estimates accounts for some part of the shift in shares of allocations in some instances. 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. As pointed out in the Attachment, special factors allowan~es, which mainly relate to natural disaster expenditures, apply to the year

( l) See, for example, Table 6 ''Ordinary Services; Current Outlay·· in .. Local Government Finance, Victoria I 979- 80", Australian Bureau of Statistics, Victorian Office; Catalogue Number 5501.2.

4 in questiOn only. Therefore in making comparisons of allocations between munici­ palities, or of individual municipalities, from year to year, the amounts shown in the schedule of the Attachment, should first be deducted from the total allocations for the relevant municipalities. 1.24 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.

CONFERENCE OF STATE GRANTS COMMISSIONS 1.26 Representatives of the Grants Commissions of the six States met in Hobart, Tasmania, on 5-6 October 1981 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. This meeting furthered the understanding of methods of inquiry, data collection and handling of fiscal equalisation methodology. These conferences, which have the support of the Local Government Ministers' Conference, are held annually in each State on a rotational basis. (The 1982 Conference will be held in South Australia on 14-15 October 1982.) A technical working party, comprising sup­ porting staff from the respective State Commissions, also meets in conjunction with the Conference to exchange information and ideas related to the practical application of fiscal equalisation methodologies.

NOTIFICATION OF STATE ALLOCATIONS 1.27 Commonwealth legislation requires that the State's allocation in respect of a year be fully allocated amongst local governing bodies in the State in the rel­ evant year; there can be no carry-over. This means that the State Grants Com­ missions must await the notification by the Commonwealth authorities ofthe precise amount available to the respective States before they can complete the allocation process. In other words, the timing of the payment of the grants is effectively determined by the Commonwealth authorities who are responsible for declaring the amount of personal income tax collected in a year and for the formal passing on of that information to the States. 1.28 As indicated in the Commission's transmittal memorandum, the Com­ mission (and the other State Grants Commissions) have experienced delays in obtaining the relevant figures in the past two years and this year the delay hampered the Commission's endeavour to complete its Determination at an early date. The delay is of more concern to other States, particularly the four States where the local government financial year commences I July. The notification of the State entitlements was not made until 6 August this year and then only after considerable prompting. Given the magnitude of the sums involved, delays of even a few days represent a significant financial loss to local government in overdraft costs or in­ terest on investments forgone. 1.29 The Commonwealth legislation provides that the Commissioner of Tax­ ation shall determine the amount of personal income tax collected in the year within one month of the end of the financial year. The legislation further provides that

5 the Treasurer "shall, as soon as practicable after being so informed (of the amount of income tax collected), inform the Premier of each State ... of the amount so determined". It is obvious that the information on tax collections was available to the Commonwealth early in July as the rounded figure was included in the Treasurer's summary of the Commonwealth budget outcome which was released on 8 July 1982. We can see no good reason for the delays that have occurred in the past two years in passing on the information to the respective States.

OTHER MATTERS 1.30 During the period April to June 1982 the Secretary of the Commission, Mr. F. M. Thomas, undertook an official study tour of Canada to examine inter­ governmental transfers of general revenue funds and the operation of revenue­ sharing programmes in that country. The tour was sponsored by the Victorian Government under the Victorian Public Service Board Overseas Travel Award Scheme.

6 Chapter 2 THE BASES OF THE DETERMINATIONS 2.1 The Commonwealth Local Government (Persona/Income Tax Sharing) Act 1976 provides for the payment to the States, for allocation to local government authorities, of an amount determined by the total personal income tax collections for the financial year immediately prior to the year to which the payments apply. In 1976-77 payments totalling $140 million were made to the States for allocation to municipalities. This was equivalent to 1.52 per cent of the personal income tax collected during 1975-76 and the same proportion was used to determine the total allocations for 1977-78 and 1978-79. In 1979-80 a total of $221.7 million was made available to the States. This reflected an increase to I. 75 per cent in local gov­ ernment's share of personal income tax revenue for allocation to municipal coun­ cils. The share was further increased to 2 per cent, effective from the 1980-81 allocations, fulfilling an undertaking given in 1977 to raise local government's share of personal income tax revenue to this level during the life of the Parliament. The same proportion has been used to determine the total available for allocation. 2.2 The total amount available to all six States for allocation to local gov­ ernment authorities in 1982-83 was $424,486,300, an increase of20.98 per cent over the amount for 1981-82. The apportionment to the six States is set out in the Com­ monwealth 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 1982-83 are shown below:

Percentage Amount($) New South Wales 36.4977 154,927,736 Victoria 25.4513 108,037,282 Queensland 16.8606 71,570,937 South Australia 8.6010 36,510,067 Western Australia 9.3897 39,857,990 Tasmania 3.1997 13,582,288 100.0000 424,486,300 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 $1,919 m.; of this total amount Victoria has received $488 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 which 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, sec­ tion 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 oft he 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, follow­ ing extensive research by the Working Party on Local Government Finance, rec­ ommended that the As-of-Right component be 40 per cent of the State's total allocation and that each municipality's entitlement be determined on the basis of: Population 85 per cent Area 15 per cent The same basis has been used for determining the As-of-Right entitlement for all allocations since that time 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 1982-83 allocations the population and area figures used were taken from the pub­ lication of the Australian Bureau of Statistics, "Estimated Resident Population in Local Government Areas - Victoria 30 June 1981 and 1976 (Preliminary)" (Catalogue Number 3201.2). 2.7 Only two municipalities, the Shire of Pyalong and the Shire of Rosedale, received the minimum As-of-Right entitlement in the 1982-83 allocations. The allocation to the Shire of Rosedale of its As-of-Right Entitlement only, which constitutes a reduction in the amount allocated to that municipality below that received last year, reflects the very substantial increase in the value of the Esso­ B.H.P. oil and gas complex at Longford and the effect this has had on the Shire's relative capacity to raise revenue. The effect of valuation increases of this nature on the allocations has been referred to in paragraphs 1.18 and 1.19. 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 of the As-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 Commission Act 1976 which is to determine the allocations on general equalisation principles, with the proviso that the amount 'so determined for each municipality shall not be less than the "As-of-Right En­ titlement" 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

8 each municipality is able to function, by reasonable effort, at a standard not ap­ preciably below the standards of other municipalities in the State. The term ··so far as is practicable" 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 (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 municipal­ ities 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 ac­ tivities of municipalities which are below the standard of other municipalities sim­ ply because of differences in policy decisions. For example, a low standard of service in a municipality may be a reflection of low rate policies adopted by successive Councils; this low standard of service would not be recognised in the grant al­ locations. 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 pro­ vided in other municipalities. 2.11 A concomitant of reasonable effort is that the methodology of fiscal equalisation be neutral in terms of the effort made by Councils to raise revenue or provide services, except that it be at a reasonable level. 'Effort neutral' means that a Council should not be able to influence the size of the allocation for its municipality by deliberate policy decisions, nor should the bases for the allocations constrain the independence of the policy-making role of Councils. If it were not so, those Councils which were best able could maximise the share of the grants for their municipalities at the expense of other municipalities. Also, if the Com­ mission were able to influence the policies of Councils because of the way by which it determined the allocations, it could become, in effect, the principal determinant of revenue-raising and expenditure policies at the local government level, which would be an abrogation of the responsibilities of the elected Councils. 2.12 A 'reasonable level of effort' is recognised, and an 'effort neutral' effect achieved, by using standard levels of rates and expenditures for the various func­ tions and applying objective measures wherever practicable to determine what allowances should be made. The Commission relies upon the levels of rates and expenditures which Councils themselves have most commonly set as reasonable in the circumstances within which they function. The level of 'reasonable effort' used by the Commission is, in effect, the consensus of the 211 municipal councils in the State.

Revenue Raising Needs 2.13 The first element in the equalisation equation, capacity to raise revenue, is a reflection of the value of rateable property within each municipality, which is the sole taxing base available to local government. Clearly, municipalities with higher values of rateable property can raise a given quantum of revenue more readily than those with lower values. It is appropriate, therefore, to use this "better-off' group as the benchmark or standard against which the capacity of other munici­ palities 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.

9 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 char­ acteristics of the municipality but, at the same time, have a relative advantage in raising revenue and therefore be able to meet a large part of the additional costs from its own resources. It follows that relatively high costs of services within a municipality do not necessarily mean that the municipality should receive a large general revenue grant allocation. 2.15 The Commission has referred in its previous Reports to the problems it has encountered in the measurement of 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-metropolita,n 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 con­ fidential 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 val­ uations 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 com­ parisons of taxable capacity between larger government units (i.e. for comparisons between States) but have been found to have serious defects when used for making comparisons between the .very much smaller local government units. The Com­ mission has been examining the use of per assessment and per property values as more realistic bases for comparison, arguing that the capacity of a municipality to levy a quantum of rates is not dependent upon the estimated number of persons in the area at a given time but upon the value of assessable properties within the municipality. However, difficulties have been encountered in the application of these bases to the measurement of relative revenue-raising capacity, particularly because of the problem of defining what constitutes a property. Allowances for differences in revenue-raising capacity embodied in the 1979-80 and 1980-81 al­ locl.l.tions were based on the mean of values calculated using per head values of rateable property on the one hand arid per assessment values of rateable property on the other. For the 1981-82 allocations and again this year the Commission 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 prop­ erty types should be recognised. Thus, the Commission separately measures capacity to raise revenue from residential property, capacity to raise revenue from commercial and industrial property and capacity to raise revenue from rural and other property. Allowance is also made for the relative proportions of each of the three classes of property in the total valuation of each municipality. The allowance for capacity to raise revenue is, therefore, the sum of the allowances for the three classes of property, weighted for the mix of property types. 2.18 Since 1979-80, adjustments have been made to residential property values for Category 2 municipalities to take account of differences in values which can be related to differences in market pressures rather than to differences in financial

10 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 of undeveloped properties. The proportions of residential dwellings to total res­ idential properties were calculated and adjustments made to the numbers of res­ idential 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 value-s 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 prop­ erty 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.

Expenditure Needs and Disabilities 2.20 Allowances for differences in the cost of local government services is the second element of the fiscal equalisation equation. Expenditure by a munici­ pality on the various functions can reflect a number of factors, e.g. Council prior­ ities, 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, iso­ lation 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 of the municipalities. 2.21 The statistical measurement of needs and disabilities in relation to the cost of services has undergone considerable refinement in recent years, with the availability of more detailed and comprehensive data from the annual Return of Local Government Accounting and General Information. The much-improvea data base has permitted more objective measurements to be made of allowances for differences in costs of services and has provided a more reliable basis for examining the possibility of further expanding the use of objective measures. Nevertheless the Commission is still required to exercise judgment in the evaluation of the data and its relevance to the circumstances of each municipality. This highlights the importance that the Commission attaches to the detailed inspections of each municipality. 2.22 The expenditure component of the allocations is the summation of assessments of relative needs and disabilities over the range of municipal functions, generally following the functional classification of expenditure adopted by the Australian Bureau of Statistics. The broad classifications are given in paragraph 2.31, along with the subdivisions for each classification which were considered in detail. 2.23 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 arrange­ ments 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.

11 2.24 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. 2.25 Needs allowances are assessed by reference to objective data. For example, needs for personal services functions (health, welfare, recreation, etc.) are assessed by comparing the demographic characteristics of each municipality with the average characteristics for the State as a whole. Variations from the State average characteristics can be taken to indicate positive or negative needs and the degree of variation can be used to calculate the level of needs allowance that should be taken into account for the relevant functions. 2.26 Needs (and disabilities) calculations can be made in terms of expend­ iture 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, has been 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 and 1982-83 allocations. 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. 2.27 Changes were also made to the bases for calculating road maintenance needs. These changes relate to the discounting procedures which are used to re­ move 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 1982-83 allocations the Commission continued with the practice adopted for 1981- 82 of discounting the total length of road to reflect the level of financial involvement by each municipality in the maintenance of the various classes of roads. The needs allowances were then calculated in relation to the discounted road lengths. In this way recognition is given to the level of government grants for the whole of the road system and not only to above (or below) standard length. This change had the effect of reducing the weight given to road maintenance needs allowances in allowances for roads overall and hence reduced the weight given to allowances for roads works generally. Details of the changed procedure are given in Appendix IV. 2.28 ''Disabilities'· relates to differences in costs which arise essentially from the physical characteristics of each municipality. Terrain, climate, location, traffic conditions, regional use, isolation, sparsity, rate of population growth, etc. are illustrations of inherent characteristics which could influence the costs of functions in each of the municipalities compared with the norm. Recognition is also given to the ethnic characteristics of the population in different areas, which can involve Councils in higher administration costs because of the need to communicate to ratepayers and residents in a number of languages. Library costs may also be higher because of the need to cm ry multi-lingual book stocks in areas with high con­ centrations of non-English-speaking people or to provide a larger range of large print books where the proportion of elderly in the population is high. Again the

12 variations from the norm can be reflected as positive disabilities (high costs situa­ tions), zero disabilities (normal costs situations) or negative disabilities (low costs situations). 2.29 The derivations of disability factors cannot be done directly from the data, as individual levels of expenditure may be as much the reflection of policy attitudes and differences in efficiency, as the reflection of cost differences attrib­ utable to inherent characteristics. However, expenditure levels can be used as a first indicator of cost differences compared with the norm, but other evidence, such as that from submissions and general knowledge gained from inspections, is used to confirm that differences in cost levels are a reflection of inherent char­ acteristics 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 main­ tenance function. 2.30 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 determi­ nation of standards by the Commission. 2.31 The Commission derived unit costs from the expenditure data supplied in the Return ofAccounting and General Information for the financial year ended 30 September 1981. The following parameters were used: General Administration Growth and Planning - average rate of population growth over past five years. Isolation and Sparsity population and distance from Melbourne. Law, Order and Public Safety Fire Protection population. Health Infants and Mothers - proportion of population aged less than five years. Preventative Services - population. Other population. We/fare 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 popu­ lation 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.

13 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 of approved repair and res­ toration works. 2.32 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 2.26, the gross disability so assessed for a function was discounted by the proportion that expenditure on the function by a municipality from its own resources bears to its total expenditure on the function from all sources. This approach is predicated on the basis that government programs of assistance have the general aim of setting standards of service and the incidence of such assistance is restricted by the availability of funds. Therefore it is reasonable to include expenditure from all sources when determining standard levels of expenditure; hence this approach is commonly referred to as the inclusion method. The discounting of the gross al­ lowances described above ensures that needs and disability allowances are related to ratepayers' contributions to expenditure and avoids double counting in relation to government 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 2.33 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 therefore be reduced so that the total allocated equals the total available. This is achieved by discounting each municipality's total fiscal equalisation requirement by the proportion that the amount available bears to the total sum required for the 211 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 avail­ able 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.

14 2.34 Technical details of the various methodologies used for calculating rev­ enue needs and expenditure needs and disabilities are given in Appendix IV. The changes made from time to time to the method of calculating the various com­ ponents 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 rel­ ativities should be minimal and most Councils should then be able to estimate, with reasonable certainty, their municipality's share of the amount available for distribution, subject to the qualifications about variations in road works, valuations and development activity outlined in paragraphs 1.16 to 1.20. 2.35 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 in Appendix 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 of local 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 com­ prehensive knowledge of the specific circumstances of each municipality. It under­ scores the importance of the inspections particularly, as well as the importance of updating submissions when any significant changes to circumstances occur. Above all, it underscores the importance of accuracy in completing the annual returns of information which provide a statistical background profile of each municipality.

NATURAL DISASTERS 2.36 With the spread of drought conditions in agricultural and pastoral areas of the State, the Commission has received inquiries about its policy in relation to assistance that might be rendered by Councils to primary producers and others affected by the drought. The principles of special factor allowances arising from the effects of natural disasters and Councils' decisions in relation to them were spelt out in the Commission's 1978 Annual Report, after raising the issues with conferences of local government representatives throughout the State. This arose from actions taken or proposed to be taken by some Councils foJiowing the Feb­ ruary 1977 bushfires in the Western District, the October 1977 hail storm in the Mildura area and the February 1978 fires in the Bairnsdale area. (See paragraphs 2.35 to 2.41, Victoria Grants Commission Annual Report 1978.) 2.37 In general, the Commission can only recognise expenditure incurred by Councils as a result of the effects of natural disasters that are approved under the Commonwealth/State arrangements for natural disaster relief and restoration. On the production of documentary proof that the expenditure claimed has been approved under these arrangements, the Commission will include in the relevant allocation a special factor allowance equivalent to the net cost incurred by the Council on approved measures in relation to the disaster. Any other expenditure incurred by the Council, which is not an approved measure, is regarded as a dis­ cretionary or policy decision for which no allowance will be made. 2.38 The main issue in relation to the 1977 bushfires was the remission or deferment of rates; this is an issue that could arise in relation to the drought situa­ tion. As stated on that occasion "the overwhelming consensus, with which the

15 Commission concurs, was that the financial effects of discretionary or policy de­ cisions of Councils concerning rate remissions or deferments should not be taken into account by the Commission as a special factor. To take them into account was seen as opening up a wide area of discretion for Councils for remission of rates, with the expectation of having the revenue forgone being made up in the allocation of the general revenue grants, effectively passing the cost on to all other municipalities." 2.39 The financial effects of drought are analogous to the effects of an in­ dustry recession which reduces primary producers' incomes, the extent of the effect depending upon the severity of the drought or recession. As stated in the 1978 Report, fluctuations in incomes are common for most industries, primary and secondary (see paragraph 2.41). If the Commission were to make positive allow­ ances for the drop in incomes for a particular industry or sectors of an industry, whatever the cause, then logically it should make an equivalent negative allowance when the relevant sectors experience better conditions. This would introduce an element of instability into the allocations which, the Commission believes, would be unacceptable. Further, if the effects of the drought or a recession are long-run then they will be manifested in a relative decline in property values in affected areas and this effect will be carried through to the revenue component of the al­ locations automatically. The Commission's view is that this is the only effect that it should recognise, other than expenditure by Councils on approved relief and restoration measures. 2.40 The Commission would welcome constructive comments and sugges­ tions relevant to any of the matters outlined in this Report. ACKNOWLEDGEMENTS 2.41 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. 2.42 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 appre­ ciative of this service to the Commission. 2.43 We wish also to record our appreciation for the help of the Local Gov­ ernment Department throughout the year, especially the Valuer-General's Office which has supplied us with much detailed information about valuation changes throughout the State. 2.44 Finally we acknowledge the help and support of the Commission's staff who have been equal to all the demands put on them throughout another busy round of inspections, data analysis and associated tasks.

16 APPENDIX I VICTORIA GRANTS COMMISSION

The Hon. F. N. Wilkes, M.P., Minister for Local Government, 480 Collins Street, MELBOURNE. VIC. 3000.

Determination c~f Allocations of General Revenue Assistance to Municipal Councils in 1982-83

We have pleasure in submitting to you the Determination of allocations of general revenue grants to municipal Councils in Victoria for the 1982-83 financial year.

Victoria's share of general revenue grants for local government for 1982-83. being made available under the Commonwealth Local Government (Persona/In­ come Tax Sharing) Act 1976, is S 108,037,282, an increase of 20.98 per cent on the State's share for 1981-82. 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.

In determining the grant for each municipality, the Commission has followed broad equalisation principles, giving consideration to needs and disabilities of each municipality and the effort made to function effectively and provide reasonable services. Special factors, such as natural disasters, which affected the expenditures of individual municipalities in the 1980-81 financial year have also been taken into account. A table is attached to the Determination showing the amount of such allowances included in the 1981-82 allocations and in the allocations now deter­ mined for 1982-83. In the allocations for 1982-83 the grant determined for each municipality is not less than its As-of-Right entitlement. These entitlements have been calculated by taking 40 per cent of the total amount for the State and allocating this as follows: Population ...... 85 per cent Area ...... 15 per cent

This basis for calculating the As-of-Right entitlement has applied since the State first became responsible for the distribution of the general revenue grants to local government authorities.

At the time of the last allocation the Commission advised that it had completed a three-year programme during which each of the 211 municipalities in the State had been inspected, spending a full day with each Council in most instances. The three-year cycle of visits placed heavy demands on the members and staff which would have been difficult to sustain for a longer period; therefore, it was decided to extend the next round of visits over a five-year period. In accordance with this, the Commission has undertaken inspections of forty-three municipalities through­ out the State since the last allocations were announced. These inspections extend the knowledge of members of the Commission of the municipalities and provide opportunity for discussion with the respective Councils and their officers about the Commission's work.

17 The continued upgrading of financial data and other information about the 211 municipalities has assisted in the development of more precise statistical measurements of fiscal need, which underlie the allocations. However, it is difficult to devise 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 against the background of the considerable knowledge of local government that it has accumulated during the past five years.

We have emphasised in past years the volatile nature of some of the elements upon which the allocations are based. The legislation prescribes two principal elements that have to be considered in the allocation process - capacity to raise revenue and relative costs of services. The former is a reflection of the relative value of rateable property in each municipality. As indicated in the Valuer-General's Reports covering the 1980 and 1981 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, while in rural areas land used predominantly for cattle grazing. and for dairying also showed strong increases in values.

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 off-setting increases in expenditure needs. We have found it necessary to reduce the allocation for Rosedale Shire below that received last year because of a very substantial increase in the value of the Esso-B.H.P. oil and gas complex at Longford. The Shire's allocation for 1982-83 has been determined by reference to its '·As-of-Right'' entitlement. Further details of factors affecting the relative increases in allocations will be given in the Commission's 1982 Annual Report.

We were hampered in our endeavour to complete the Determination of al­ locations at an early date by the delay in the release of the precise allocation for Victoria by the Commonwealth authorities (other States were, of course, similarly affected). The Commonwealth legislation provides that the Commissioner of Tax­ ation shall determine the amount of personal income tax collected in the year within one month of the end of the financial year.

The legislation further provides that the Treasurer "shall, as soon as prac­ ticable after being so informed (of the amount of income tax collected), inform the Premier of each State ... of the amount so determined". It is obvious that the information on tax collections was available to the Commonwealth early in July as the rounded figure was included in the Treasurer's summary of the Com­ monwealth budget outcome which was released on 8 July 1982. We can see no good reason for the delays that have occurred in the past two years in passing on the information to the respective States.

We remain indebted to the Councillors and staff of all municipalities for the assistance given to the Commission throughout the year, but especially to those representing the municipalities in which inspections were undertaken. The con­ tinued co-operation and assistance of the Australian Bureau of Statistics in pro­ viding 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 of the Department of Local Government, particularly

18 the Valuer-General's Office which has provided us with much detailed information about valuations for each municipality. The contribution ofthe Commission's staff in the provision of support services is similarly gratefully acknowledged.

D. V. MOYE, Chairman

L. F. CHEFFERS, Member

S. L. COOPER, Member

F. M. THOMAS Secretary

10 August 1982.

19 APPENDIX I - continued VICTORIA GRANTS COMMISSION

DETERMINATION OF ALLOCATIONS OF GENERAL REVENUE GRANTS TO MUNICIPAL COUNCILS IN VICTORIA- 1982-83 FINANCIAL YEAR

Alberton (S) ...... 442,000 Colac (S) ...... 393,000 Alexandra (S) ...... 275,000 Collingwood (C) ...... 566,000 Altona (C) ...... 570,000 Corio (S) ...... 1,065,000 Arapiles (S) ...... 146,000 Cranbourne (S) ...... 800,000 Ararat (C) ...... 430,000 Creswick (S) ...... 260,000 Ararat (S) ...... 459,000 Croydon (C) ...... 846,000 Avoca (S) ...... 218,000 Dandenong (C) ...... 1,092,000 Avon (S) ...... 228,000 Daylesford & Glenlyon (S) .. 374,000 Bacchus Marsh (S) .. .. . 287,000 Deakin (S) ...... 499,000 Bairnsdale (T) ...... 440,000 Diamond Valley (S) ...... 1,085,000 Bairnsdale (S) ...... 336,000 Dimboola (S) ...... 361,282 Ballaarat (C) ...... 1,274,000 Donald (S) ...... 192,000 Ballan (S) ...... 152,000 Doncaster & Templestowe (C) ...... 1,305,000 Ballarat (S) ...... 674,000 Dundas (S) ...... 240,000 Bannockburn (S) ...... 146,000 Dunmunkle (S) ...... 258,000 Barrabool (S) ...... 176,000 Eaglehawk (B) ...... 294,000 Bass (S) ...... 286,000 East Loddon (S) ...... 200,000 Beechworth (S) ...... 274,000 Echuca (C) ...... 330,000 Belfast (S) ...... 137,000 Eltham (S) ...... 845,000 Bellarine (S) ...... 840,000 Essendon (C) ...... 1,148,000 Benalla (C) ...... 331,000 Euroa (S) ...... 244,000 Benalla (S) ...... 155,000 Fitzroy (C) ...... 659,000 Bendigo (C) ...... 1,208,000 F1inders (S) ...... 544,000 Berwick (C) ...... 845,000 Footscray (C) ...... I ,629,000 Bet Bet (S) ...... 180,000 Frankston (C) ...... 1,395,000 Birchip (S) ...... 144,000 Geelong (C) ...... 477,000 Box Hill (C) ...... 846,000 Geelong West (C) ...... 405,000 Bright (S) ...... 354,000 Gisborne (S) ...... 221,000 Brighton (C) ...... 394,000 Glenelg (S) ...... 388,000 Broadford (S) ...... 125,000 Gordon (S) ...... 279,000 Broadmeadows (C) ...... 2,301,000 Goulburn (S) ...... 132,000 Brunswick (C) ...... 1,105,000 Grenville (S) ...... 206,000 Bulla (S) ...... 405,000 Hamilton (C) ...... 446,000 Buln Buln (S) ...... 465,000 Hampden (S) ...... 441,000 Bungaree (S) ...... 160,000 Hastings (S) ...... 288,000 Buninyong (S) ...... 406,000 Hawthorn (C) ...... 408,000 Camberwell (C) ...... 1,148,000 Healesville (S) ...... 445,000 Camperdown (T) ...... 186,000 Heidelberg (C) ...... 1,329,000 Castlemaine (C) ...... 387,000 Heytesbury (S) ...... 587,000 Caulfield (C) ...... 1,096,000 Horsham (C) ...... 574,000 Charlton (S) ...... 148,000 Huntly (S) ...... 153,000 Chelsea (C) ...... 835,000 Kaniva (S) ...... 208,000 Chiltern (S) ...... 128,000 Kara Kara (S) ...... 124,000 Cobram (S) ...... 378,000 Karkarooc (S) ...... 371,000 Coburg (C) ...... 1,285,000 Keilor (C) ...... 1,835,000 Cohuna {S) ...... 258,000 Kerang (B) ...... 200,000 Colac (C) ...... 368,000 Kerang (S) ...... 366,000

20 APPENDIX I continued -·····---·····------Municipality $ Municipality $

---·····--~·····--- Kew (C) ...... 417,000 Port Melbourne (C) ...... 225,000 Kilmore (S) ...... 220,000 Prahran (C) ...... 703,000 Knox (C) ...... 1,495,000 Preston (C) ...... 1,550,000 Koroit (B) ...... 64,000 Pyalong (S) ...... 24,000 Korong (S) ...... 338,000 Queenscliffe (B) ...... 120,000 Korumburra (S) ...... 412,000 Richmond (C) ...... 593,000 Kowree (S) ...... 321,000 Ringwood (C) ...... 702,000 Kyabram (T) ...... 238,000 Ripon (S) ...... 225,000 Kyneton (S) ...... 347,000 Rochester (S) ...... 532,000 Leigh (S) ...... 128,000 Rodney (S) ...... 615,000 Lexton (S) ...... 74,000 Romsey (S) ...... 162,000 Lillydale (S) ...... 1,270,000 Rosedale (S) ...... 126,000 Lowan (S) ...... 257,000 Rutherglen (S) ...... 189,000 Mclvor (S) ...... 130,000 St. Arnaud (T) ...... 183,000 Maffra (S) ...... 493,000 St. Kilda (C) ...... 1,065,000 Maldon (S) ...... 148,000 Sale (C) ...... 585,000 Malvern (C) ...... 575,000 Sandringham (C) ...... 453,000 Mansfield (S) ...... 340,000 Sebastopol (B) ...... 270,000 Marong (S) ...... 355,000 Seymour (S) ...... 419,000 Maryborough (C) ...... 348,000 Shepparton (C) ...... 734,000 Melbourne (C) ...... 1,910,000 Shepparton (S) ...... 463,000 Melton (S) ...... 600,000 Sherbrooke (S) ...... 910,000 Metcalfe (S) ...... 150,000 South Barwon (C) ...... 925,000 Mildura (C) ...... 593,000 South Gippsland (S) ...... 398,000 Mildura (S) ...... 942,000 South Melbourne (C) ...... 343,000 Minhamite (S) ...... 221,000 Springvale (C) ...... I ,270,000 Mirboo (S) ...... 126,000 Stawell (T) ...... 327,000 Moe (C) ...... 654,000 Stawell (S) ...... 251 ,000 Moorabbin (C) ...... 1,000,000 Strathfieldsaye (S) ...... 368,000 Mordialloc (C) ...... 584,000 Sunshine (C) ...... 2,240,000 Mornington (S) ...... 445,000 Swan Hill (C) ...... 398,000 Mortlake (S) ...... 238,000 Swan Hill (S) ...... 744,000 Morwell (S) ...... 984,000 Talbot & Clunes (S) ...... 170,000 Mount Rouse (S) ...... 158,000 Tallangatta (S) ...... 328,000 Myrtleford (S) ...... 252,000 Tambo (S) ...... 490,000 Narracan (S) ...... 558,000 Traralgon (C) ...... 716,000 Nathalia (S) ...... 243,000 Traralgon (S) ...... 92,000 Newham & Woodend (S) . . . . 164,000 Tullaroop (S) ...... 120,000 Newstead (S) ...... 138,000 Tungamah (S) ...... 238,000 Newtown (C) ...... 270,000 Upper Murray (S) ...... 235,000 Northcote (C) ...... 1,321,000 Upper Yarra (S) ...... 387,000 Numurkah (S) ...... 376,000 Violet Town (S) ...... 99,000 Nunawading (C) ...... I ,275,000 Walpeup (S) ...... 390,000 Oakleigh (C) ...... 862,000 Wangaratta (C) ...... 632,000 Omeo (S) ...... 230,000 Wangaratta (S) ...... 128,000 Orbost (S) ...... 517,000 Wannon (S) ...... 282,000 Otway (S) ...... 415,000 Waranga (S) ...... 395,000 Oxley (S) ...... 293,000 Warracknabeal (S) ...... 242,000 Pakenham (S) ...... 604,000 Warragul (S) ...... 355,000 Phillip Island (S) ...... 292,000 Warrnambool (C) ...... 836,000 Port Fairy (B) ...... 150,000 Warrnambool (S) ...... 405,000 Portland (T) ...... 446,000 Waverley (C) ...... I ,386,000 Portland (S) ...... 547,000 Werribee (S) ...... 1,237,000

21 APPENDIX I - continued $ Whittlesea (S) ...... 1,185,000 Williamstown (C) ...... 898,000 Wimmera (S) ...... 250,000 Winchelsea (S) ...... 316,000 Wodonga (C) ...... 688,000 Wonthaggi (B) ...... 336,000 Woorayl (S) ...... : ...... 575,000 Wycheproof (S) ...... 384,000 Yackandandah (S) ...... 200,000 Yarrawonga (S) ...... 258,000 Yea (S) ...... 206,000 TOTAL $108,037,282

D. V. MOYE, Chairman

L. F. CHEFFERS, Member

S. L. COOPER, Member

22 APPENDIX I continued VICTORIA GRANTS COMMISSION GENERAL REVENUE GRANTS TO MUNICIPALITIES IN VICTORIA

AMOUNTS INCLUDED IN ALLOCATIONS FOR SPECIAL FACTORS 1981-82 AND 1982-83

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 res­ toring 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 munici­ palities from year to year, the relevant amounts shown below should be deducted from the allocations for the respective municipalities.

Amount included for Special Factors $'000 $'000 Municipality Natural Disasters Natural Disasters 1981-82 1982-83 Arapiles Shire ...... Nil 12 Ararat Shire ...... 6 19

Bellarine Shire ...... Nil 11

Chiltern Shire ...... Nil 14 Colac Shire ...... 5 Nil

Deakin Shire ...... Nil 7 Dimboola Shire ...... Nil 11.282

East Loddon Shire ...... Nil 32

Gordon Shire 10 29

Huntly Shire 2 Nil

Kaniva Shire ...... Nil 12 Kara Kara Shire ...... Nil 12 Karkarooc Shire ...... Nil 11 Kowree Shire ...... Nil 9 Kyneton Shire ...... 0. 711 I

Lowan Shire ...... Nil 22

Metcalfe Shire ...... Nil 17 Mortlake Shire ...... Nil 7

N athalia Shire ...... I 1 Newstead Shire ...... Nil 10

Omeo Shire ...... Nil 7 Orbost Shire ...... 7 17

Pyalong Shire ...... 11

23 APPENDIX I - continued Amount included for Special Factors $'000 $,000 Municipality Natural Disasters Natural Disasters 1981-82 1982-83 Rodney Shire ...... Nil 5 Rutherglen Shire ...... Nil 21 Sandringham City ...... Nil 6 Shepparton Shire ...... Nil 21 Strathfieldsaye Shire ...... 8 Nil Swan Hill City ...... Nil 15 Swan Hill Shire ...... Nil 16 Tambo Shire ...... 9 Nil Wangaratta City ...... Nil 10 Wangaratta Shire ...... Nil 30 Winchelsea Shire ...... 1 Nil Woorayl Shire ...... 20 5 Yackandandah Shire ...... Nil 12

24 APPENDIX II MUNICIPALITIES INSPECTED 1981-82

1981 27 October ...... Shire of Kerang 28 October ...... Shire of Gordon 29 October ...... Shire of East Loddon 11 November ...... City of Caulfield 12 November ...... City of Prahran 13 November ...... City of South Melbourne 17 November ...... City of Horsham 18 November ...... Shire of Wimmera 19 November ...... Shire of Stawell 1 December ...... Town of Portland 2 December ...... Shire of Portland 8 December ...... City of Fitzroy 9 December ...... City of Melbourne 10 December ...... City of Collingwood 1982 2 February ...... City of Geelong West 3 February ...... City of Geelong 4 February ...... City of Newtown 9 February ...... Shire of Bairnsdale 10 February ...... Town of Bairnsdale 11 February ...... Shire of Avon 23 February ...... Shire of Upper Murray 24 February ...... Shire of Tallangatta 25 February ...... City of Wodonga 2 March ...... Shire of Bright 3 March ...... Shire of Myrt1eford 4 March ...... Shire of Omeo 10 March ...... Shire of Healesville 11 March ...... Shire of Lillydale 23 March ...... Shire of Melton 24 March ...... City of Keilor 25 March ...... City of Essendon 30 March ...... Shire of Maffra 31 March ...... City of Sale I April ...... Shire of Rosedale 20 April ...... Shire of Traralgon 21 April ...... City of Traralgon 22 April ...... Shire of Morwell 4 May ...... Shire of Rutherglen 5 May ...... City of Wangaratta 6 May ...... Shire of Wangaratta 11 May ...... Shire of Rodney 12 May ...... Shire of Shepparton 13 May ...... City of Shepparton

25 APPENDIX III

CATEGORIES OF MUNICIPALITIES (As Revised 1979)

CATEGORY 1 (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 Springvale City Chelsea City Hawthorn City Oakleigh City Sunshine City Coburg City Heidelberg City Port Melbourne City Waverley City Collingwood City Keilor City Prahran City Williamstown City Croydon City Kew City

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

CATEGORY 3 (23 Councils) Ballarat Shire Eltham Shire Mornington Shire South Barwon City Bellarine Shire Flinders Shire Morwell Shire Strathfieldsaye Shire Berwick City Hastings Shire Pakenham Shire Warragul Shire Bulla Shire Lillydale Shire Rodney Shire W erribee 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 Mclvor Shire Benalla Shire Deakin Shire Huntly Shire Maffra Shire

26 APPENDIX Ill - continued

CATEGORY 4 (ll2 Councils) -continued

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

27 APPENDIX IV FORMULAE GENERAL FORMULA

Where G = grant r = relevant municipality (claimant) R = revenue component E expenditure component The Revenue Component (R) for any municipality can be expressed as:

R0 =Pc.ts(T, T0 ) Where P = population, number of assessments or other parameter = rate in $ (tax rate) standard T = revenue or tax base (value of rateable property) per head, or assessment, or other parameter and the Expenditure Component (E) as

so that the general formula becomes:

Gr = Pe . t,(T, - Trl + E, . & REVENUE COMPONENT (R)

Re = Pc . t,(Ts - T0 ) This is the basic formula used by the Commission. is the weighted average of the top 25 per cent of municipalities in the State and, measured in assessment terms, is derived as follows: T = tot(il_yalue ofrateable property ()ftop 25 p~r cent. and s total number of assessments in top 25 per cent· t = total @te~ collected by top ~~r 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, com- mercial 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 Tsr =total yalue o(!esidential property of top 2~cent ; and total number of residential assessments in top 25 per cent t = t()Jal ritJes c_ollecJed from residential pr~:merty bytop 25 pc;r cent sr total value of rateable property of top 25 per cent (,. = residential)

28 APPENDIX IV continued

Similarly for 'Commercial and Industrial' (C) and 'Rural and Other' (0), substituting the relevant figures in respect of each for the residential property fig­ ures. 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 ad­ justing 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: ~residential assess.ments in State ( = RES) + I all assessments m State I commercial and industrial assessments in State COM) + I all assessments in State

I rural and other assessments in State ( = OTH) = 1 I all assessments in State i.e. RES + COM + OTH = 1 The standard distribution is then applied to the total number of properties in each local authority to obtain a standardised property distribution for each authority. Adjusted values per property for each class of property are then obtained for each local authority by dividing the standardised property class number into the actual value 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. 1 Adjusted assessment numbers for i h municipality

I 1 assessment numbers . RES + I 1 assessment numbers . COM

+ I 1 assessment numbers . OTH Then, _ I 1 value of residential p!QP~_!!y . - I 1 assessment numbers . RES ' _ I1 value of commercial and industrial property ; and - I 1 assessment numbers . COM _ I 1 value of rural and other property - I 1 assessment numbers . OTH and Re I 1 assessment numbers . RES . tsr (Tsr- Tcr) +

I 1 assessment numbers . COM . tsc (Tsc -Tee) +

I 1 assessment numbers . OTH . t50 (Tso- T<, 0 )

I 1 assessment numbers . [RES . tsr (Tsr - Tcr) + COM . tsc

(Tsc - Tee) + OTH . t50 (T50 Tc 0 )]

29 APPENDIX IV - continued EXPENDITURE COMPONENT (E)

Allowances for expenditure components can be separated into two ele­ ments: 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,.. Cs ( ~~,. - Kms) Ae As Where Ac = municipality's number of assessments Cs standard cost per kilometre Kmc municipality's length of road responsibility per assessment Ac Kms standard length of road responsibility per assessment As Road cost disabilities are calculated by the formula: Kmc. C,. gc Where Kffic municipality's total length of road responsibility in kilometres Cs standard cost per kilometre gc = municipality's cost disability factor In order to establish the impact on the ratepayer (as some part of roads ex­ penditure 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 cal­ culated 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 allowance for roads, is the sum of the two calculations the needs calculation and the disabilities calculation. The final formula is therefore:

Where GRc = municipality's grant for road needs and disabilities

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

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

GAc [Pc. C(A)s( ;: - ;: ~+Pc. C(A)s. & J D Where GAc = allowance for expenditure needs and disabilities in relation to services for the pensionable group Pc = municipality's population C(A)s = standard cost of services for pensionable group per head of eligible population Ac proportion of persons in municipality receiving pensions and Pc supplements As standard proportion of pensionable group (e.g. State average Ps 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 substituting the relevant characteristic for A, the pensionable group. In other areas of local government expenditure, where needs are not a factor, the calculations are simply related to cost disabilities and are based on the general formula: Gc = (Es. &) D Where Gc = allowance for the function Es = standard gross cost of the function gc = 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 of service was standard) then its disability factor could be derived simply by: Ec gc =---1 Es = disability factor = municipality's expenditure per unit on the function = standard expenditure per unit on the function

(subtracting I from _§_reduces the factor to a fraction) Es

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

32 APPENDIX V DISTRIBUTION OF RATEABLE PROPERTY, RATE INCOME, RATING AND POPULATION 1975-76 to 1980-81

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 Com­ monwealth Grants Commission which were those applying at the end of the finan­ cial 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 re­ vised annual estimates of population published by the Australian Bureau of Stat­ istics 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. 4. Due to changes in the categorisation of municipalities the figures presented below differ from the corresponding figures appearing in Reports prior to 1979. 5. Minor discrepancies between figures may occur in some instances due to rounding. Rateable Implied Year Property Rate Income Rate in $ Population (1 October- NAV (cents) at 30 September) 30 June $m $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 %3.10 174.7 76.4'3 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 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 3%,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 1l.l 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 ALL OTHER MUNICIPALITIES 1975-76 698.7 692.23 77.1 79.30 11.5 1,009,400 1976-77 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 1,169,650

33 APPENDIX V - continued

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

TOTAL FOR STATE 1975-76 2654.8 709.39 257.0 71.92 10.1 3,742,350 1976-77 3497.5 925.48 284.6 77.75 8.4 3,779,130 1977-78 3761.7 985.86 325.9 86.20 8.7 3,815,670 1978-79 3873.3 1005.78 357.6 93.74 9.3 3,851,060 1979-80 4196.5 1080.15 400.5 103.09 9.5 3,885,110 1980-81 4628.2 1172.17 460.8 116.71 10.0 3,948,390

NOTE: Statistics relating to the functional distribution of municipal expenditure will appear in detail in the Australian Bureau of Statistics local government bulletins.

34 APPENDIX VI TAX SHARING FUNDS FOR LOCAL GOVERNMENT AUTHORITIES 1974-75 to 1982-83 ($,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 361510 39,858 13,582 424,486

Total ... 701,428 488,340 323,941 164,767 179,884 60,524 1,918,884

(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 1982-83'.

F D Atkinson Government Printer Melbourne No. 42-54700/82-Price $1 70