Media Release - Asset Renewal Gap

Media Release - Asset Renewal Gap

Yarriambiack Shire Council's Asset Renewal Gap grows to $63million over the Next Decade

In 2025, the Yarriambiack Shire Council conducted a comprehensive assessment of its assets, evaluating their condition to determine the necessary future investment required to maintain the asset base at standards consistent with community expectations.

The results were alarming, with a $63million renewal gap now expected over the next decade. This has been revised upwards from previous initial projections of $27.5 million.

The picture is bleak, as there are insufficient funds to address the deteriorating condition of assets. Consequently, the Council cannot meet the demand to maintain or improve its major asset base - roads.

The Council faces significant challenges in managing and maintaining its 4,603 kilometres of roads, 102 kilometres of constructed and unconstructed pathways, 86 kilometres of kerb and channel, and 92 buildings, all within the constraints of limited funding and heavy dependence on grants.

This is not something new, with the issue being reported some 15 years ago.

In 2010, a report by Merv and Rohan Whelan identified 18 rural local councils as being particularly unsustainable due to environmental and structural factors beyond their control. The report found that many small rural shires face structural disadvantage and cannot operate effectively under the same financial models as larger urban councils, with their sustainability rated as negative or very negative. It recommended increased grant funding for councils with small populations to address this imbalance. The report also called for a reassessment of the responsibilities placed on these councils to reduce operational burdens. Additionally, it emphasised the need for support to help councils identify and implement operational efficiencies. The findings noted that relying on rate increases alone was not a sustainable solution and highlighted the need for a more flexible and equitable approach to rate capping. In addition, the report stressed the importance of strong asset and expense management to control costs and prevent the deterioration of community assets.

Moving forward to 2018, the Victorian Parliament Inquiry into the Sustainability and Operational Challenges of Victorias Rural and Regional Council's noted the Whelan Report and the challenges for rural Councils with large areas, and asset bases and limited revenue opportunities.

Fast forward to 2025, and the Yarriambiack Shire Council's Financial Health Check and Long-Term Financial Plan outlines that the identified problems have only got worse. With a low population base, and large geographic area, along with an extensive road network the Council faces many significant challenges.

The report identified that the Council operates efficiently, using products like Xero to manage their finances, and in recent times has streamlined service delivery, transitioning away from the direct delivery of kindergartens, maternal child health and the commonwealth home support program.

However, the council has limited ability to generate additional revenue, and with rates, charges and user fees only contributing to 51% of its overall expenditure requirements, the Council is heavily reliant on grant funding.

With an additional $63 million required to maintain the Council's assets over the next 10 years, the future of the Council and its assets is looking bleak.

Mayor Andrew McLean is calling on the State and Federal Governments to assess how small rural Councils are funded and allocate funds to address these important assets.

"The Roads within our Shire are important strategic routes, to move grains, legumes and agricultural product to markets. We need significant investment commitments to bring our road networks up to the standards our communities and businesses need, require and deserve", stated Mayor McLean

"The funding model needs to change. We are now in an election year, we want to see a commitment to rural communities and an investment into our road networks, and community assets", continued Mayor McLean.

Whilst the Yarriambiack Shire population is sparce in comparison to metropolitan areas, the Shire generates approximately $550-$780 million in annual economic output, depending on the dataset and year used, placing it among the most productive percapita rural economies in Victoria.

Its Gross Regional Product (GRP) is estimated at around $556 million, despite a population of just over 6,500 people, highlighting its strong productivity relative to size.

"We carry our own weight and deserve significant investment into our region and strongly encourage the Government and Opposition to consider this as a priority as they go to the election later this year", concluded Mayor McLean.

End Media Release

Mayor Andrew McLean

Yarriambiack Shire

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