It is clearly evident the Victorian Government must address the imbalance in the financial strength of country municipalities compared to those in metropolitan Melbourne and Bendigo , Ballarat and Geelong , The Nationals Member for Murray Valley , Ken Jasper, said today.

Mr Jasper was commenting on the Whelan Report into Local Government, which found small rural councils are being starved of critical funding, with 18 rural municipalities actually unsustainable and battling for survival.

It is no surprise that three of these 18 municipalities are in North East Victoria; Indigo, Alpine and Towong - municipalities with large land areas, including extensive Crown lands, and small populations, with a low rate base but still required to provide a full range of services, he said.

Local Government amalgamations in the 1990s strengthened municipalities, particularly those in metropolitan Melbourne which have small areas and large populations for rating revenue purposes, Mr Jasper said.

I am aware that a number of municipalities in country Victoria which are still battling with the inequity of funding for infrastructure requirements, welfare services and extensive road networks and bridges.

Mr Jasper said he could recall other Government reports, during the 1990s, which had clearly indicated a need for a readjustment of State and Federal grants to country municipalities to assist them in continuing to fund services to ratepayers.

The latest report, by Local Government consultant, Merv Whelan, found that cost shifting by the Victorian Government, together with the increasing demand for services, has left 18 small councils unsustainable, he said.

Local municipalities can ill afford to continue picking up additional State Government services, such as the management of roadside weeds and pests, without the provision of adequate funding, Mr Jasper said.

The report states that the Local Government Act 1989 requires councils to work in partnership with the Governments of Victoria and Australia to achieve the best outcomes for the local community and to improve the quality of life of the people in the municipal district, he said.