Following the State Government announcement of a 0.6 per cent increase in the government guarantee fee on loans to councils, WALGA has collected data from members to determine the effect on their budgets for the coming year.
Mr Pickard, who is also the Joondalup Mayor, said the additional $4 million from the increased borrowing charges would most likely have to be sourced from ratepayers given the advanced stage of council budgets.
He said the increase was inconsistent with other State and Federal initiatives designed to leverage local governments to invest in key infrastructure and encourage reduced interest rates to stimulate economic activity.
�There was no discussion with the sector on the potential for this increase to be imposed and the sector remains uninformed as to the rationale for the increase and what the policy objective is that the increase seeks to fulfil,� he said.
�It would be ironic if the State was to lose all of the interest levied on the sector�s $670 million in borrowings due to their desire for an additional $4 million in revenue. We believe, however, that local communities should not be made to pay for late policy decisions of the State such as this and will do our best to ensure this does not happen in future.�
He said the local government sector was considering alternative financing mechanisms and WALGA was seeking an explanation from the State Government on how the revenue generated would be distributed to help councils inform ratepayers of the effect on their budgets and rates.