Tax inflates council costs
THE carbon tax is adding 1.5 per cent to municipal council costs.
Cr John Duscher said this during budget discussions at the Bass Coast Shire Council meeting recently.
Cr Duscher, the council’s representative to the Municipal Association of Victoria (MAV), said this was the figure the MAV had worked out.
Shire CEO Allan Bawden later confirmed the figure, saying the 1.5 per cent had been built into the council’s 2012-13 budget. It’s to help cover the additional electricity and fuel costs that will rise because of carbon pricing.
He said it was hard to know the full impact, but the tax will flow through to utilities.
The cost of street lighting, for example, is a major impost on council, coming in at several hundred thousand dollars a year. An application to the State Government for funding to switch street lighting to a cheaper, greener version was unsuccessful.
Mr Bawden said council had tried to establish what the impact of the carbon tax might be in order to be able to account for it.
Another looming charge is the carbon pricing of greenhouse gas emissions from landfill. Mr Bawden said that so far, council’s Grantville tip comes under the figure by which the tax will be levied, but there is no guarantee that will continue.
Council staff are investigating several different ways of keeping landfill emissions down, such as investigating environmentally friendly ways of burning the emissions off.
South Gippsland Shire Council is yet to determine the cost of the carbon tax.
Electricity impacts are expected to have the greatest impact next year, but council is continuing to budget for rising material costs of 2.5 per cent in 2012-13, council spokesperson Jeannie Hicks said.
“Aside from the obvious cost impact on electricity costs of the carbon tax that becomes effective on July 1, 2013, no increased costs have been factored into the 2012-13 and forward budgets,” she said.
“This is due to the uncertainty of trying to identify the actual cost impact.
“As the carbon pricing actually crystallises in 2012-13, the forward budgets if required, will be adjusted accordingly.”
Ms Hicks expected the cost of construction projects to increase more than CPI.
“For the 2012-13 financial year, the Economic Data and Policy Development Unit of Municipal Association of Victoria estimated the Local Government Cost Index to be 3.90 per cent,” she said.
“The forward budgets, in some instances can be particularly challenging in that expenses have generally been adjusted at less than the Local Government Cost Index projections as well as Consumer Price Index forecasts.
“It is expected that productivity gains will be required over the coming years to offset the resulting cost pressures.”
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