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.