West Australian Shires Face Service Cuts as Forestry Payments Rerouted to Treasury

Regional shires in West Australia's South West are experiencing a revenue reduction, which may lead to service cutbacks, following a revision in forestry rates payment. The Forest Products Commission (FPC) has ceased direct rate payments to local councils, instead redirecting these funds to the state Treasury.

Financial Impact on Councils

Seven local governments within the Warren-Blackwood region of Western Australia are projected to collectively lose $325,000 during the current financial year.

The Shire of Boyup Brook, with fewer than 2,000 residents, is significantly affected. It anticipates a loss of $135,000 this financial year, a figure that could increase to $150,000. This amount represents approximately 3.5 percent of the shire's total rates.

The shortfall could impact community grants, road maintenance, and agreements with local organizations such as the visitor centre and library.
— Helen O'Connell, president of Boyup Brook Shire

The shire also contributes to funding the town's sole doctor, raising concerns about potential risks to essential health services.

Other councils also face impacts from the changes. The Shire of Donnybrook Balingup currently anticipates a shortfall of $9,400, while the Shire of Manjimup's cut represents about 0.5 percent of its total rates revenue.

Government Position and Council Response

A state government spokesperson explained that the FPC is exempt from paying local government rates on freehold land under Section 41(2) of the Forest Products Act 2000, which mandates payments to Treasury. The spokesperson noted that FPC had previously paid rates directly to local governments in error.

Forestry Minister Jackie Jarvis held discussions with affected councils in January to explore options for mitigating the financial impact.

Councils warn that the revenue shortfall may necessitate cuts to core services, including roads, bridges, and maintenance plans, or require drawing from financial reserves. Vivienne MacCarthy, Chair of the Warren Blackwood Alliance of Councils, noted that the change, implemented mid-year, has made budget adjustments challenging.

Shire President Donnell Buegge of Manjimup urged the state government to quickly identify a solution to ensure funds are returned to communities for local services.