THE federal budget will cost the Indigo Shire more than $1.7 million, according to council staff.
New chief executive Gerry Smith said a freeze on indexation would cost the council $1.76 million in grants, an amount he said the shire was “not able to bear”.
“It’s not something we can just absorb,” he said.
“There are going to be impacts as a result of this budget.
“We’re going to work through that quite deliberately and comprehensively rather than make a knee-jerk reaction.”
Mr Smith said the reduction was considerable, given the council was expected to generate about $32.5 million in income next financial year and spend about $28 million.
The council will absorb next financial year’s red-uction of $138,000 and should know which areas will be trimmed by Aug-ust or September.
“I can’t tell you right now which services are likely to be affected,” Mr Smith said.
“I can tell you there will be services affected by the cuts.
“We can’t absorb these and maintain services when there are these funding cuts.”
Indigo mayor Bernard Gaffney will attend the national general assembly of local government in Canberra from Sunday week — June 15 to 18.
President of the Victorian Municipal Association Bill McArthur said the association would raise concerns about the “catastrophic impact” of the budget.
“Councils have only one revenue source, and that’s rates,” he said.
“So such a significant cut leaves councils with two choices — to either cut services or to increase rates.
“For smaller shires, that could amount to a 5 per cent rate rise on top of any other proposed rate increase, just to recoup lost federal money.”
The association wants the federal government to reconsider the changes.
“We’ll most certainly be lobbying them,” Cr McArthur said.
“We encourage each and every council to lobby their federal members about these funding cuts.”
Indigo Shire has set out a 5.7 per cent rate increase in its draft budget for the next financial year.