CLARK, Ms Bronwen, Chief Executive Officer, National Growth Areas Alliance FROST, Ms Sheena, Chief Executive Officer, Hume City Council LLOYD, Mr Craig, Chief Executive Officer, City of Whittlesea MOORE, Councillor Carly, Mayor, Hume City Council OWENS, Mr Shaun, Chief Financial Officer, Brimbank City Council VIDALES, Mr Marcelo, Director, Corporate Services, Brimbank City Council [14:38] CHAIR: Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege, and it is being broadcast live. I now invite you to make a brief opening statement before we proceed to discussion. Mr Vidales : On behalf of Brimbank City Council, we thank the committee for the opportunity to discuss our submission to the inquiry into local government funding and fiscal sustainability. Local government in Victoria and across Australia plays a critical role in enabling economic, social and cultural development of municipalities by delivering essential services, maintaining community infrastructure, supporting local economies and responding to the diverse, growing and changing needs of our communities. For us at Brimbank, our council serves a lower socioeconomic community that is also highly multicultural. This unique demographic presents both opportunities and challenges in delivering equitable and effective services for them. Our challenges include low economic levels, high unemployment and a history of land contamination. Here are a few key stats that will help the committee to better understand the position. About 5.9 per cent of our residents are unemployed, compared to a national average of 4.3. Approximately 12.5 per cent of adults that reside in Brimbank face food insecurity for their families. We have the highest gambling losses in Victoria, with an estimated $1.36 billion lost in the last 10 years. Brimbank hosts the highest proportion of asylum seekers in Victoria, with 21.7 per cent, and an average of 48.2 per cent of our residents were born overseas. Our council is committed to serving this diverse community with integrity, efficiency and responsiveness. However, the financial sustainability of our council is under significant pressure due to the combined effects of rate capping, historical contamination issues, ageing assets and increased maintenance costs. This is not unique to us, but our socioeconomic disadvantage and multicultural population creates additional pressure. We thank the committee for the opportunity to present and speak to you today. CHAIR: Thank you. Ms Clark : Thank you, Madam Chair and the committee, for the opportunity to speak today. The National Growth Areas Alliance represents 29 councils across outer metropolitan areas. Together we make up just five per cent of local government areas across Australia, yet are home to 22 per cent of Australia's population. Last week's release of ABS figures showed we just clicked over to six million people. We are located on the outskirts of capital city areas, in largely greenfield residential developments. They are where Australia's population growth and residential growth is really happening. In the last five years, 650,000 people moved to our local government areas. That's 43 per cent of all of Australia's population growth. We range in council size from small, formerly regional shires who are now transitioning into cities and suburbs through to major metropolitan cities of half a million people. Across that continuum of growth, the common experience is an extraordinary scale and pace of growth. Since the Housing Accord targets were released that scale and pace has become even greater, and 26 per cent—over 306,000 homes—of the Housing Accord's 1.2 million target will be built in just our 29 growth area councils. We are home to one in four of all of Australia's children. Around 33 per cent of our residents speak a language other than English at home, which is well above the national average. We are home to 18 per cent of Australia's working population, but 12 per cent of its jobs. We have communities that are vibrant, diverse and aspirational. People move to growth areas to start their life and pursue their great Australian dream. They are starting businesses. They're contributing in a civic and financial way to our community and to Australia's economy, and we believe they should have equal access to the same quality infrastructure and services as other Australians. However, in federal policy and funding frameworks, including local government funding, growth area councils are not distinguished in any way from other councils across Australia. If we look at Ipswich in South-East Queensland, a very large, complex city managing growth of tens of thousands of people over the last five years, it is treated for funding purposes in the same way as well-established metropolitan councils with stable populations and decades of infrastructure already in place. Similarly, over in Playford in South Australia, where very nearby another 50,000 homes will soon be built in three main developments, there is incredible population growth, urban expansion on top of existing socioeconomic challenges. It's transitioning from a manufacturing based economy, while delivering so many services and so much housing and infrastructure, again with very few legacy assets but funded in the same way as well-serviced inner city councils. I'll draw Melton, as well, as a good example. There are 79 families moving in every week to Melton LGA. It has a population already larger than Ballarat and Bendigo, and it's only just pouring the foundations of its first hospital. Primary schools open that are already over enrolled. Despite the difference of Melton—or Hume and Whittlesea, who are my colleagues here at the table—they're treated in the same way as other local government areas across Australia. We would like to suggest that it's time to move on from an outdated model of how metropolitan Australia is viewed, and this would flow down into all levels of funding, particularly local government funding. We cannot continue to treat metropolitan areas as a single homogeneous block, because growth areas are distinctly different and will continue to be. Most of our member councils have a good 25-year growth plan. We are advocating for a new geographical standard to be adopted by the Australian Bureau of Statistics and then used in planning and reporting. That standard would reflect the location of growth area councils, the population growth rate and the housing increases. We do already recognise rural and remote councils. They face distinct challenges, as I'm sure Mr Venning can testify. It's important that policy settings differ to meet their needs. We're saying a similar thing must be applied at a metropolitan level. We're asking for a differentiated, grounded-in-reality based approach to funding so that we can recognise and plan and fund growth where it is occurring and invest upfront in enabling infrastructure—an approach that really sees local government as a genuine partner in the future of Australia. Councillor Moore : I'd like to thank the committee for their interest in the issue and the opportunity to speak today. The introduction of the rate cap has played an important role in strengthening a council's accountability and encouraging efficiency in decision-making. However, it does not adequately reflect the true cost of delivering the expanding range of services, programs and infrastructure that local communities rely on. For fast-growing councils like Hume, population growth places increasing pressure on the delivery of new and expanded services and infrastructure investment and maintenance. Managing these demands within a capped revenue environment is particularly challenging, forcing councils to make difficult decisions about which services and projects can be funded and which must be deferred or, in some cases, not delivered at all. To address these challenges, Hume City Council has put forward several recommendations for the federal government to consider, with the aim of aiding the financial sustainability of the local government sector. With the time I have today, I'm just going to address three of these. The first is cost shifting. Ongoing cost shifting from state and federal governments continues to place additional financial pressure on councils. Historically, this has impacted areas such as libraries and school-crossing supervision, but it has increasingly extended into other critical services, including maternal and child health, early years infrastructure, citizenship ceremonies and building reform. We're calling on the federal government to assess and acknowledge the true financial impact of cost shifting on councils. The second recommendation I'd like to discuss is the Victorian government's rate cap. The council has consistently stated that the rate cap should be reformed to better reflect the true cost of providing local government services. Specifically, the council has called on the Victorian government to replace the CPI based rate cap with a local government cost index that more accurately aligns with a council's actual cost drivers. These are things like wage growth in accordance with enterprise agreements, construction and materials cost inflation, asset maintenance and renewal costs, compliance and regulatory obligations, and the financial impacts of state and federal cost shifting. I want to be clear that the council is not calling for the rate cap to be removed. Rather, we are seeking a rate-capping framework that more accurately reflects the real cost of services and infrastructure that councils deliver instead of the current approach, which is based on a general basket of goods. Finally, in relation to untied funding through the federal Financial Assistance Grant program, local government has experienced a steady decline in its share of federal taxation revenue, from around one per cent in the nineties to approximately 0.5 per cent today, despite growing responsibilities and rising costs. Accordingly, the council is seeking a commitment from the federal government to restore financial assistance grants to at least one per cent of federal tax revenue, particularly in light of sustained construction cost increases and the ongoing infrastructure demands facing our local communities. We recognise that there is much the federal government can do to support the long-term financial sustainability of the local government sector, and we look forward to your consideration of our recommendations. Mr Lloyd : Much has already been said by my colleagues here, but, first of all, thank you again for the opportunity to present and also for reading our written submission. As has been mentioned, the City of Whittlesea is one of the fastest growing municipalities in Victoria. The population is currently just over a quarter of a million, and by 2040 we'll be up to nearly 450,000 people. That growth is presenting some huge challenges for us in terms of increased costs; trying to keep up with infrastructure, as the mayor of Hume has mentioned; in particular, the impacts of slowing and removed grant programs at both federal and state levels, which is having a huge impact on us; our rapidly growing asset base; and the change in that asset base. We not only need funding for managing the growth, but we can't do that and maintain the existing assets in the older areas of the municipality at the same time. Community expectations continue to grow like they do with all levels of government, and that's something that local government battles with continuously. Our costs are increasing, and, as the mayor mentioned, the rate cap is sitting well below the actual cost of inflation and has done so for some considerable time in Victoria, and that's now really starting to take its toll. The City of Whittlesea doesn't have a formal view on the rate cap. I just note that the income that we're receiving from rates is starting to fall well behind the costs that we're incurring, as evidenced most recently by the recent Fair Work decision to pass on the fuel increase costs from contractors to councils, when councils have no way of raising that additional revenue. Again, it's not our position that the trucking companies and transport companies shouldn't be receiving that support during this really difficult time, but shifting the entire cost onto councils with no additional way of raising revenue places all the other costs of council at risk. We also are impacted by cost shifting, as has been mentioned, through a whole range of services, and there are increasing levies and taxes from the state government, in particular, as well. The waste levy increases have been enormous in Victoria. That caused a huge increase in our waste charges last year, and, of course, it's very difficult for councils to pass those on to our communities year on year when the waste levy rises continuously. We've also seen cuts to some of our most important grant programs. The Growing Suburbs Fund is a good example of that. That was $50 million a year and available to the collective group of growth councils, and it was then cut down to $10 million and, in last year's state budget, removed completely. That was, as I said, one of the most important grant funding streams that we relied on to assist us with growth. In our case, the federal assistance grants, combined with other income that we receive and are very grateful for from the federal government, contribute 7.6 per cent of our annual income. I'll leave it there, and I'm happy to take questions. CHAIR: I've got a question for Hume City Council. One of your submission's recommendations is to develop 'a coordinated, multilevel intergovernmental funding agreement which links population, growth and cost escalation factors to improve predictability, accountability and sustainability across all tiers'. Why is this your recommendation, and what is your ideal outcome from such an agreement? Ms Frost : That is borne from our experience as a growth area, and I have one of my colleagues here. We have a joint initiative with three councils—Mitchell, Whittlesea and Hume—which our elected representatives have bought into, for an area called Cloverton, which is going to be home to half a million people. It is across all our boundaries and it probably is a great example of and captures the challenge that is three separate entities with the funding challenges we're describing. We have worked in partnership and have been working with the state government to try and get the state government to the table. Equally, we have received urban Precincts and Partnerships funding, from the federal government, in order to start planning for that. We're still trying to get the state to the table. The key barrier is the coordination level, and the coordination is not only of the infrastructure needs and the funding pipelines but of how we plan for services for the communities. We have, fortunately, got the three councils working together, but it is not hardwired and knitted in at the federal and state levels. So that suggestion is borne of our experience that, if we can knit together the funding pipeline, it would reflect what we're seeing at the federal policy level—that, at the federal level, there has been a recognition of the importance of place and urban precincts and planning—but it needs to be knitted together with funding pipelines in addition to service planning. In terms of exactly what that looks like, we don't necessarily have a view, but you will have heard from speakers already around the need for the data sources to be common. If the data sources are common, then in theory you should be able to create those clear pathways to knit together and coordinate it between federal and state levels. There's a lot of friction in our experiences, and I'm sure most people here would be able to talk to that friction that's experienced around some of those initiatives. CHAIR: Mr Burnell. Mr BURNELL: Thank you all for providing evidence today. Ms Clark, I'm keen to get a perspective from the peak body around allocation of employment lands in these high-growth areas. In South Australia, I know that that falls under the state jurisdiction, but are we getting it right to ensure that the mix between high residential expansion meets the locality needs for employment land and the ability to then increase rate revenue for the LGAs that are experiencing this high level of growth? Ms Clark : On paper, we might be getting it partly right. As you said, it does come down to state level to allocate where employment and industrial lands are. A couple of factors influence that, so it's not as simple as 'then investment and jobs will come'. Quite often, there are significant delays in servicing industrial and employment lands, so we're lacking sewerage, water, power and digital infrastructure. There isn't a coordinated, streamlined way to ensure that happens as people are moving in and need jobs. We're lacking transport connections. There are some great examples in south-east Melbourne. You've got one—dare I say Curtis Road? But there's a great example in south-east Melbourne where the Monash Freeway runs between the residential area and a huge tract of employment land, but it's about a 40-minute round trip to the interchange to get over there. So these things are not sequenced in the right way. The latest risk we have is around data centres. Industrial land in growth areas is perfectly located near transmission lines and all those sorts of things—perfect for data centres. We've had a lot of examples where that employment land is scheduled to have perhaps 300 jobs in that parcel of land. The data centre requires 75. There's a lot on paper that looks like the vicinity of industrial employment lands is good, but it's the sequencing of all of those other things and then land use, ultimately, that doesn't result in the local jobs needed for local residents. Mr BURNELL: In the outer northern suburbs in South Australia, we've got significant issues with traffic congestion, road degradation et cetera because people are having to travel significant distances to get to their place of work or because of a lack of connectivity to critical transport infrastructure. If planning were done more cohesively to better connect communities, is it fair to say that that would have a downward effect on the cost to run a local government in the form of upkeep and provision of additional services to keep people connected? Ms Clark : If it were easier to get around and to— Mr BURNELL: Ultimately, this inquiry is about trying to find additional sources of revenue et cetera or, alternatively, to reduce your overheads to provide services to communities. We've got to look at this a little bit more holistically than just 'my hand is outstretched and I want more money'. We've got to come up collectively across all three tiers of government with a practical solution to better provide for our communities. I'm interested to know whether there is proper dialogue going on between the three tiers to ensure that we are developing, especially in our high-growth areas, communities that are going to be able to better move around our outdoor spaces that focus on efficiencies around the movement of people and the pressures that are placed on critical road infrastructure et cetera. Mr Lloyd : If I use an example from the City of Whittlesea and look at Donnybrook, a huge growth area way up to the north, population is growing very rapidly. Housing is going in. There's a single road in. The planning is simply not there. So, to Ms Frost's point earlier on, it's the coordination piece that's missing. Also, in terms of where you're talking about increased cost, the lack of coordination is actually costing a lot of money. Councils are spending a lot of money on planning our resources. It's duplicated then by the state when they're looking at their infrastructure and their roads. It's duplicated again by the federal government when you're looking at your roads and your infrastructure. If all of that were brought together in a structured way and we had proper localised planning, I'm certain that those costs would be reduced. Ms Clark : There are a couple of really good examples where that coordination hasn't taken place. One is Australia's strategic objective or strategic goal around defence industry. If we look at Adelaide and the Edinburgh defence area and we look at the southern suburbs of Perth, massive investment around AUKUS is not matched with local plans or place based plans for housing, transport and other employment land. We have that opportunity. We know what Australia's major strategic goals are, and we're not looking at things from a place based perspective to say what else is needed in that area. There are some fantastic opportunities in Adelaide's north. As you say, a new housing estate might be built that has access to a freeway into the city. Great, but it's not connected to anywhere else. Again, it's the place based coordination that's missing. Mr Vidales : It's integrated transport plus the planning that we're referring to, and I think the examples are clear that, yes, we can create efficiencies, and there are benefits from a community point of view if we think about the future in the context of movement, for example. You talk about how we realise some of these savings. If we think about the rail corridors that we're bringing and the new developments, we want to also release the pressure on the freeways. We can't keep on expanding the roads that don't exist, because those will be places that we actually need to—with a certain capacity that we maximise. And then the maintenance of those roads, at a federal, state and local level, increases. We then talk about creating places where people are going to be moving through active transport modes, and that requires investment as well. The integrated aspect of how we actually think holistically about creating placemaking, as Ms Clark referred to, has to really think about high growth, but, as we're creating density, that's actually going to create more pressure, because the network can only cap at a certain point. Therefore, we need to think more creatively about how we start thinking about the movements that are taking place and the investment to also supply the needs and services that these communities that are going to be residing there will need. It's about infrastructure, but it's the services that they're going to be requiring—from education, at a federal level and state level; maternal health nurses; and services for multicultural communities that have different needs, to the basic things like leisure activities, parks and all that. Ultimately, we probably focus on big things, but creating those spaces, grass cutting, cutting trees—you guys will hear it from communities. We do too. Those are the things that they look for as well. Mr BURNELL: Thank you. CHAIR: Dr Haines. Dr HAINES: Thank you to National Growth Areas Alliance, Brimbank City Council, City of Whittlesea and Hume City Council. It's so important to hear from you and hear the constraints that you are facing. I'm particularly curious around housing. I understand that you're five per cent of local governments but you're expected to deliver 26 per cent of national housing under the housing accord. The Commonwealth has made significant commitments to housing supply, but I'm really concerned and interested in your response to the critical enabling infrastructure. I know you have mentioned this. What would you like to see the Commonwealth do to support local governments to deliver the infrastructure required specifically for new housing supply? In addition to that, have any of you been successful in accessing enabling infrastructure funding under the National Housing Infrastructure Facility or the Housing Support Program? Ms Clark : It is greatly concerning that targets have been set—306,000 homes. It's up to state governments as to how they will implement their part of the housing accord. We did some work with the Urban Development Institute of Australia last year and found around 30 per cent of that housing target in growth areas is restrained due to enabling infrastructure. The only avenue for that at that moment was the Housing Support Program, which I think was only $500 million, but that meant councils were entering into competitive funding rounds for water, sewerage, stormwater and power. From my perspective, that's giving Australians an indication that the very basic infrastructure they need to survive in the house that they're probably going to pay $1.2 million for isn't worthy of investment from the Commonwealth. I would suggest that, where those large-scale greenfield residential areas will be developed in unused land—so there is no existing infrastructure—the enabling infrastructure needs to come first. We cannot expect people, as they are in south-west Sydney, to pay $1.5 million for a home and to have their sewerage collected in a tank at the end of the street. It's ridiculous that, in this day and age, that's where the critical enabling infrastructure is falling down. We would love to see that the Housing Support Program, for example, not just repeated but increased in scale and that enabling infrastructure—the very basics—is not part of competitive funding rounds. Dr HAINES: So you'd like to see the housing support fund continued and increased but with different criteria. Is that what I'm hearing? Ms Clark : That's right. Dr HAINES: And that we take away the competitive nature and go to a needs based funding model. Is that what you're saying? Ms Clark : Correct. Dr HAINES: And how would that look? How would the Commonwealth do this? Ms Clark : The problem that I've seen so far is that the Commonwealth has handed over large tracts of money to state and territory governments to deliver housing accord targets. Apart from that small amount of funding through the Housing Support Program, it would appear they're no longer involved. I think, if we're going to meet the targets and actually solve the housing crisis, we need to bring back some Commonwealth involvement in where those houses are built and how the enabling infrastructure is funded. Obviously, increasing density in existing areas is a vital part of meeting housing targets, but we're talking about enhancing existing infrastructure versus building a new house in a paddock where there is nothing and no compensation or no additional consideration given for that type of development. It's all put in the same bucket. Whether we're trying to connect sewerage or build a mobile phone tower, growth areas, if they were differently classified, have very distinct needs to other parts of our cities. Dr HAINES: That's really helpful. CHAIR: Did you want to make a comment, Mr Lloyd? Mr Lloyd : Yes, I'm happy to. To the other part of your question, the City of Whittlesea was successful in one of the housing supply grants from the federal government of $7.1 million, which we're very grateful for. That was towards 35 new housing lots. The money was going towards road and civil infrastructure to enable that project to come to fruition, which is fantastic. Bringing it back to the coordination challenges, at the same time as we're receiving the federal government money, we're now having to pay windfall gains tax to the state government for the development of those sites under the new windfall gains tax to which councils are not exempt. That takes away any profit that we may make that we can then reinvest into more affordable housing, because we're handing that money over to the state government with no coordination between the three levels of government. I just wanted to put that into context that the three really need to work together. Dr HAINES: That's really helpful, Craig. Thank you. Is there anyone else there who has been successful on the housing support fund? CHAIR: It doesn't appear so. Is that all, Dr Haines? Dr HAINES: Yes, that's all. CHAIR: I'll move to Ms Jordan-Baird. Ms JORDAN-BAIRD: Thank you so much for coming in and for your contributions today. I've been really looking forward to this roundtable. I represent a really fast growing electorate in Melbourne's western suburbs. It's great to see you, Brimbank. Like the member for Spence, we're seeing huge population growth happening, and I know this has a real impact on the delivery of social services and infrastructure. My question is about infrastructure. Like Dr Haines and Mr Burnell, I see examples in our community in the western suburbs, with things like Taylors Road. This is a really important arterial road in the Brimbank LGA, which also extends to the Melton LGA. We're seeing significant growth in the Melton LGA, which is adding additional pressure to the road at the Brimbank end. My question is to all our witnesses here today. What's one recommendation you would make to our committee in relation to fiscal sustainability and waiting for infrastructure in your communities? Mr Vidales : Taylors Road is absolutely one of our key priorities— Ms JORDAN-BAIRD: I couldn't help myself! Mr Vidales : and I'm sure from Melton likewise. We have an active campaign to duplicate that road but also to actually say that this road is no longer a local road; it's an arterial, and therefore it should move to being a state controlled road as a key priority. Ms JORDAN-BAIRD: I'm very supportive of that. Mr Vidales : Thank you for that. It is the type of activity that really needs to have a lot more clarity at a state level and some policies around when roads actually reach that level of capacity and then move to better management by the right authority. So there have to be some principles that need to be applied to this. For us, in the infrastructure space, we welcome the grants. They really support the activity and needs of our community. The challenges that we face are with the renewals and maintenance. It's always welcoming to create a new pavilion, to create a new sports ground to support the needs of the community. But, from an LGA view, that grant is received and we build it, and then we have to maintain it for its life and then replace it, as the community has an expectation of that level of service. We would love to see a better approach to grants that support the longer sustainability of infrastructure in the context of maintenance and renewal. Potentially, as others have mentioned before, through the financial assistance grants, that can be brought back to around that one per cent mark. That would really be an option. Alternative methods could be looking at hypothecating some of the GST arrangements so they can create a revenue stream without adding more pressure to the cost-of-living raise that our communities are facing across the nation. Ms Clark : I will come back to our main advocacy recommendation at the moment, which is the creation of a geographical standard classification for growth areas. That will require a redefinition of our metropolitan areas. They're not homogeneous, large populations and large areas of land, and they need differentiation. There are four levels of regionality, for example, but only one metropolitan level. If we had that distinction, then it could be used in planning. It could be used to plan for roads and active transport because we know where the population will go. And then it could be used in reporting as well to match where funding is going. I just found a stat for Dr Haines, which is from the Housing Support Program: despite the fact our members are delivering 26 per cent of that target, we receive seven per cent of Housing Support Program grants. That would be my one difference. Councillor Moore : I'm going to take the opportunity to say a couple of things. Firstly, in relation to the comments around arterial roads, Hume launched its advocacy priorities just a couple of weeks ago, and, of our six top priorities, four of them are arterial roads. Certainly in a big growth council like Hume, where we've got some very established parts of our city—and we've got growth on two fronts—the arterial roads is a significant issue that has the biggest impact on our residents. One of the other things I wanted to mention in relation to infrastructure is in regard to things like leisure centres. We see significant demand for those types of facilities in our growth areas, but a leisure centre will cost you about $200 million. No council—not Hume, not a big council, not a small council—can afford to fund that kind of investment in infrastructure. So, certainly, we're looking for opportunities to partner with all of the other levels of government to deliver that infrastructure. In the current system, we would never be able to fund something like that. Mr Lloyd : I'd like to add to that. I agree with everything that's been said. I just want to bring it back to the coordination piece again because, for me, talking about efficiencies. That's really where it's going to kick in. I think, if we just keep doing our own thing at local government level and federal government does their own and the states do their own, we're going to get more of the same, which is basically a huge time lag between communities growing, people moving in and the infrastructure arriving. We can't keep failing our communities by doing the same thing that we're doing today. Making those changes will actually save us all money. We've got to get ahead of the curve and start building the infrastructure as people move in or before people move in, not 10, 20 or, as in some cases for some of our rail connections, 40 years after the communities have been established, and, in some cases, we are still talking about rail connections and train stations being built. CHAIR: Mr Burnell. Mr BURNELL: I wanted to quickly come back to the rate capping. It's been mentioned a lot today. I'm just having a quick look online. This was introduced in 2016 because of successive years of excessive rating increases. That's the assumption made here. I'm interested in understanding, if rate capping were removed in Victoria—because it's something we don't experience in South Australia—(1) what's to stop it from getting out of control again, if, from what I've read, that's the reason it was instigated in the first place; and (2) how much would that then assist in being able to better administer the LGA service requirements in the here and now, outside of looking at things like the FAG et cetera? Councillor Moore : Certainly, Hume is not supportive of removing the rate cap. The rate cap is a very important tool in making councils efficient with and accountable for ratepayers money and how we spend it. But what we see now is a system that doesn't work for communities or councils like Hume. It is based on the CPI—well, it's supposed to be based on the CPI—which is certainly not reflective of the goods and services that councils pay. So we're looking for a more appropriate way to determine what the rate cap should be than just CPI. It just doesn't work for councils. I think that it doesn't work for many councils, not just Hume. It's not just about growth councils. It doesn't work for rural councils. It may work for metropolitan councils, but I think we're just looking for a more appropriate framework. Mr Lloyd : I agree with that completely. To take that one step further, the rate cap was originally going to be based around CPI. What we found is that it sits well below CPI. CPI's probably not even the right measure, given the growth that we're seeing. So, to be at least one per cent—and on occasions, in some years, 1½ per cent—below where CPI is sat for the year, we're always going to be going backwards. Mr Owens : Beyond the appropriateness of how we set the rate cap, I think the approach of applying one rate cap to every council in Victoria is also challenging. You also need to consider demographic mix, size and age of population, geographic remoteness and disadvantage. I'd also suggest that the CPI isn't the right measure for us. Obviously, there's bread and milk in CPI. We need the appropriate measure for us. But, beyond that, we need to be able to—similar to the method we've spoken about for the Financial Assistance Grant—actually have an evidence based way of setting the right measure for councils. I hope, going forward, we can consider the right costs that are relevant to us and we can tailor the rate cap that's suitable for those communities. CHAIR: Mr Venning. Mr VENNING: In the Hume submission, part 3, recommendation 4 says: … all grants … be funded directly to Local Government rather than through the relevant State Government. I agree, but can you just build on that a little bit and on why that's your recommendation. Ms Frost : It's a layer of bureaucracy that's not needed. At its simplest, it's more efficient to send it to us. The reason the federal government will award it to us is that they understand we can deliver. All of our councils have got a great track record in delivering on behalf of that. A great case in point at the moment—I don't mind saying that we did actually write to the federal government just last week about this, and my colleague here also co-signed that—is that we're still waiting on a grant that was announced in October last year from the federal government. We're still waiting on that money to be received. It's got to pass through the state. We're at a point now where we will not be able to engage contractors and the grant timelines might be at risk, as we are still waiting on actually getting the confirmed funding et cetera. Where that's sitting, I don't know, but there's a layer of administration that's simply not needed, in our view. Mr Lloyd : I'm happy to give a further example of that—a wonderful grant that we received from the federal government to fix an asset problem we had with a really important water body. From the time that the federal government allocated that money to the state government, it took the state government 14 months to issue us a funding agreement, which held up that project significantly. Mr VENNING: Great recommendation. CHAIR: We might finish there. Thank you for your attendance here today. If you have been asked to provide any additional information, would you please forward it to the secretariat by 20 May 2026. You will be sent a copy of the transcript of your evidence and will have an opportunity to request corrections to transcription errors. I now suspend the hearing. Proceedings suspended from 15:24 to 15:42 .