Federal cuts may hit local pension discounts
PENSIONER discounts for rates could knock more than half a million dollars off the Clarence Valley's bottom line over the next four years if measures in the Federal Budget are passed.
A council spokesman said the council offered rates and water rates subsidies to pensioners partially covered by federal and state government grants.
The budget papers reveal the Federal Government will terminate its part of the agreement from July 1, 2014.
Council's corporate director Ashley Lindsay said the federal budget, if passed, would have an immediate and lasting impact on the finances of all councils, including the Clarence Valley.
He said the biggest impact was through the budget measure to pause annual increases for financial assistance grants, which have historically been indexed in line with the consumer price index and population growth.
He said that in 2013-14, the council received a total $10,240,000 in general purpose and roads grants from the Commonwealth Government.
"Based on the assumption of the CPI running at 2.5% a year from 2014-15 to 2017-18, the impact of this measure to pause the CPI indexation on the financial assistance grants will cost council about $1.063 million in reduced grant income over four years," he said.
He said another substantial impact on council's finances came from the Commonwealth's decision to remove a rate subsidy it provided pensioners and other concession card holders.
Council provides concession card holders with discounts on their general rates and on their water and sewer charges.
On general rates, that discount equals half the rate, up to a maximum of $250.
On water and sewer charges, it provides a 50% discount up to a maximum of $87.50 for each charge. Historically, the State Government funded 50% of that subsidy, with local government providing 45% and the Federal Government 5%.
Under changes announced in the Federal Budget, the Commonwealth will drop its contribution to rate subsidies to concession card holders, meaning the council will need to increase its contribution to 50%.
In 2014-15 that is estimated to cost the Clarence Valley Council $121,582.
Over four years, the council would be out of pocket $504,688. Mr Lindsay said the re-introduction of indexation of fuel excises would further impact on council's finances.
He said a one cent a litre increase in diesel prices would add $11,600 to council's costs and a similar price rise for E10 prices would add another $2900 to the fuel bill.
Member for Page Chris Gulaptis said the big issues for the states was the loss of $80 billion for health and education.
"To be truthful I haven't considered things like the pensioner concessions," he said.
"It's been the major line issues that we've been focused on."
Mr Gulaptis said all these issues will be thrashed out in party room meetings before next month's state budget.