A parliamentary inquiry has uncovered allegations the Allan Labor Government held over millions in local council grants to prop up its own balance sheet.
One large regional council told the Inquiry into Local Government Funding and Services it was left with a $14 million “hole” because the state government did not follow usual convention and pay the grant before the June 30 end of financial year.
Campaspe Shire Council in northern Victoria has now received the annual financial assistance grant, but said it had fallen victim to an “accounting trick”.
Director Corporate at Campaspe Shire Council, Matthew McPherson, said: “It makes us look incompetent in terms of managing our finances”.
Asked ‘There’s a hiatus and the state government makes its revenue and makes its books look good because it’s holding onto the money but the money is then distributed in the next’, Mr McPherson said: “That’s effectively what’s happened”.
Mr McPherson said he understood the federal government made a distribution to the states prior to June for the funding, to be passed on by the state government to councils.
“Our grant was $14 million. It’s a $14 million hole,” Mr McPherson said.
Bendigo City Council said the grants are usually, for many years, paid before June 30 as a pre-payment.
Shadow Minister for Local Government, Peter Walsh, said: “For the state government to be withholding the transfer of commonwealth funds to prop up its own June 30 balance sheet just reinforces that Labor can’t manage money and Victorians are paying the price”.