Councils in Western Australia have slammed Premier Colin Barnett over claims he made on ABC Radio that council rate increases are now “really getting out of control”.

The Premier’s broadside into local government management claimed that smaller councils can be less efficient than their bigger counterparts, leading to discrepancies in rates bills between councils.

The Western Australian Local Government Association (WALGA) is furious over the sledge and immediately jumped to the defence of its members following the Premier’s comments, sheeting the back to the State Budget.

WALGA warned that local governments “should not be blamed” as primary cause of likely increases in council rates, especially after the raft of funding cuts and cost increases sheeted back to local government the 2014-15 State Budget.

The most recent WA Budget was a big loss for councils, who were expecting a helping hand from the State government following its ambitious move to push through big mergers in the Perth metropolitan area that would halve the number of councils from 30 to 15.

WALGA has estimated that between $65 million and $100 million is collectively required for councils to adequately carry out mergers.

However the peak body is now warning that that actual funding now consists of only $5 million for each of the next three years   with councils able to access low interest loans from a $45 million funding pool – money that is says simply isn’t enough.

The big problem for local governments set to amalgamate is that without adequate funding from the state government, they must bear the costs of merging themselves, a shortfall that would then require a rate hike to cover the extra expense.

The state funding hit is another straw on the camel’s back for financially struggling councils which must now face further funding reductions after federal government’s Budget freeze on Financial Assistance Grants (FAGs), that will strip $10 million from councils in WA.

Other losses include state government cuts of $70 million over three years to local roads funding; an increase of 50 per cent in street lighting charges over three years; and an increase in the household waste levy.

WALGA President Mayor Troy Pickard said the state government could not expect to cut significant funding streams to local government and hike up charges to the sector without having an impact.

“It is misleading to suggest that councils are to blame for having to increase rates when it was the state government who reduced council funding and increased costs,” Mr Pickard said.

He said it was “unfair” to blame councils for state government budget decisions and warned the Premier the “rate payers will see through the smokescreen”.

“I have been calling on the state government; ironically with support from the Premier, former Treasurer and Local Government Minister; to initiate a general review of the local government fees and charges regime for over a year now, and I’m still awaiting confirmation from the Treasurer as to the scope and Terms of Reference of the inquiry,” Mr Pickard said.