'Inequity is devastating': rural councils on the brink

A farmer cancelled his car insurance to pay council rates, only to have an accident weeks later.

Living on $11 for food a fortnight, a woman has to budget for a rates hike even though the council is cutting services.

While people in the Mid Murray Council area in regional South Australia suffer some of the highest levels of mental illness in the state, the local government had to cut back operations at a pool to save $32,000.

At the same time, funds from the council's 10,000 ratepayers maintain a road network that is equivalent to a trip from Adelaide to Melbourne and on to Perth.

That is the desperate scenario Mayor Simone Bailey has described to a federal parliamentary inquiry examining the financial sustainability of local government.

"The inequity is devastating," Ms Bailey said in an emotional statement to the inquiry sitting in Adelaide on Friday.

"We are cutting services and disposing assets, but what happens in the coming years when there's nothing left to cut or sell?"

Many rural and regional councils around Australia have told the inquiry of facing financial ruin as they take on more responsibility for services like childcare, health, housing and vast road networks.

As their oversight grows, councils say there are funding shortfalls and apparent cost shifting from state and federal governments.

The Australian Local Government Association has long been lobbying for the federal government to restore Financial Assistance Grants to one per cent of Commonwealth tax revenue.

Murray flooding SA
Staying afloat in tough times has been difficult for regional communities, an inquiry has been told.

Councils rely on the grants, which are untied and can be spent on local priorities.

Necessary rate hikes and cuts to services have been particularly hard for the community of Mannum, on the Murray River east of Adelaide, after floods in 2023, Ms Bailey told the inquiry.

The region has one of the highest rates of suicide in the state, according to the council's submission.

Ms Bailey said there are limited mental health services in the 6000 square kilometre region.

"One of our flood victims tried to get mental health support two weeks ago and was very desperate and she was told there was a 20-week wait."

Further east, the Southern Mallee District Council provides childcare to the community of 2000, having used grant money and loans to build two centres.

But it is difficult to recruit staff in rural areas, the council's chief executive Lachlan Miller told the inquiry.

"We've had to shut the centres on various days ... which means there's a bunch of primary caregivers who won't be turning up to their jobs," Mr Miller said.

"It has an impact right across the workforce in the district."

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