Ratepayers are typically skeptical regarding the value for money they receive for the rates they pay. Rate increases are invariably meet with public clamour which could be countered by factual analysis of underpinning rationales. In order to address any negative sentiment arising from rate rises, several States either have in place or are in the process of establishing and monitoring a Local Government Cost Index or similar intended to encompass all of the Councils/Shires within their jurisdiction.
The purposes, and the models and methodologies adopted, are virtually universal ie
- Quantify and aggregate local governments’ expenditure by categories [ie wages/salaries] which can be reasonably linked to independently determined cost time series [ie ABS Labour Price Index]
- Establish a base year weighted aggregate expenditure index value [start point 100]—this is taken as the Local Government Cost Index [LGCI] for the particular State/Territory for which it was calculated
- Monitor quarterly/annual movements in relevant cost time series data to enable recalculation of the Index in any subsequent period
- Use this as one indicator of trends in costs incurred by local government authorities, and hence one indicator of the extent of rate adjustment requirements
LGANT supports local government through the commissioning of a Local Government Cost Index, whereby rate changes can be demonstrated as being underpinned at least in part by increases in actual costs incurred which are beyond the control of municipal authorities. This research is conducted annually and is a multi-variable quantitative index to track changes to the principal elements underpinning the costs of providing various municipal services on a recurrent [time series] basis.