WALGA report warns of increased local government costs

The Western Australian Local Government Association (WALGA) has released its quarterly Economic Briefing, finding that the Local Government Cost Index (LGCI) grew by 0.7% in June 2017, to stand 1.4% higher over the year, the largest annual increase in the index since March 2014.

The increase in the index during June was primarily driven by machinery and equipment costs, which picked up sharply during the quarter, rising by 3.3%. Machinery and equipment costs also led growth in annual terms, rising by 3.7%. Growth in the index was also supported by the wage price index, which increased by 0.3% in the quarter, and 1.4% compared to a year earlier.

The report concluded that the increase in LGCI a sign that the worst of the downturn in the WA economy is over, and local governments should prepare for cost pressures to increase going forward. It predicted the index will rise by 2% in 2017-18, and 2.1% in 2018-19.

The report also highlighted changes to state fees and charges that will impact local government budgets, including:

  • Street lighting costs will increase by 2.83%.

  • Depending on the tariff, electricity costs will increase by up to 10.88%.

  • Water, sewerage and drainage charges will rise by 6%.

The Economic Briefing is available here.

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