STRUGGLING rural councils have been handed a lifeline by the Victorian Government.
A funding boost of up to $2.5 million has been offered to each without spending restrictions.
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The cash injection - part of the Government's four-year Local Government Infrastructure Program - will allow financially burdened rural councils to reduce their infrastructure renewal gaps.
The program has been applauded for its "no strings attached" nature, unlike past grants, which required a contribution from councils or were specifically for new infrastructure and targeted at Government ribbon cutting.
Colac Otways Shire councillor Frank Buchanan said the shire was "over the moon" about receiving $2.2 million.
"We're very pleased that the Government has recognised the situation that rural councils are in," Cr Buchanan said. "This $2.2 million lets us look at the budget items that missed out that should have been done that we realistically couldn't get from our ratepayers.
"With our budget we have three categories: a must-do category, a should-do category and a could-do category.
"We only just got through all of the must-do category and missed out on a lot of the should-do things in terms of infrastructure gap renewal, so this will let us go a long way further down the list to bring some of those things up to scratch."
Under the LGIP, Victoria's 10 largest regional councils received a fixed allocation of $2 million.
The remaining 38 rural councils got at least $1.5 million and could get up to $2.5 million.
Municipal Association of Victoria president Bill McArthur commended the program's transparency.
"Part of the beauty of this program is that there is a fair and equitable formula and it's been based on relative needs, so it means everyone gets a go at some money and they don't have to competitively bid for it so it's a real bonus," Cr McArthur said. "It'd be nice to see it continue.
"This funding has meant that the small rural councils with low populations and high infrastructure needs receive more on a per capita basis."
Cr Buchanan said that, while the funding was welcome news for rural councils, there needed to be a more consistent, long-term approach to municipal funding to allow councils to budget better into the future.