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Special edition - Cost shifting IGA

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Historic IGA to counter cost shifting signed in Canberra

Representatives from all three spheres of government have come together today to sign an historic agreement to help counter cost shifting - a practice that places an additional burden on councils estimated at between $500m and $1.1bn each year. The intergovernmental agreement is designed to improve the way the three spheres of government work together and provides a set of principles to guide the way in which functions and services are negotiated and transferred to local government. Importantly, it establishes a framework for future bilateral or trilateral agreements to be reached for the transfer of specific services or functions. Cr Bell signed the IGA on behalf of local government. Other signatories were Federal Local Government Minister, Jim Lloyd and local government ministers from all other states and territories, other than Tasmania and WA. Ministers were unable to attend from these two jurisdictions, but will sign the IGA out of session.

IGA "opens new chapter" on intergovernment relations

ALGA President, Cr Paul Bell, said this morning that while the IGA won't solve the fiscal problems confronting local government, it would "help ease the considerable cost shifting burden carried by councils". Cr Bell congratulated Jim Lloyd for his leadership on this issue and also the state and territory ministers for the cooperative approach they have taken in the negotiation of the agreement. He also praised state local government associations for the very significant role they played in bringing the IGA to life. "I now call on all parties to enthusiastically embrace the spirit of the IGA," Cr Bell said. "I'm optimistic that we can now open a new chapter in intergovernmental relations that will bring lasting benefits to the communities we collectively serve," Cr Bell said.

IGA in a nutshell

The IGA provides a framework to improve the way the three spheres of government - federal, state and local - relate to each other to achieve the best possible outcomes for communities. Key points include:

  • Federal, state and local governments agree in principle that where local government is asked or required by the federal or state government to provide a service or function, any consequential financial impact is to be considered within the context of the capacity of local government.
  • The IGA applies to new arrangements.
  • Where the Commonwealth or state seeks through non-regulatory means, the provision by local government of a service or function they shall respect the right of local governing bodies to decide whether they will accept the responsibility, negotiate with the relevant local governing bodies or peak local government representative body and, where possible, reach agreement on the terms and conditions.
  • Where the Commonwealth or state/territory and local government propose that a service or function should be jointly provided, they shall agree to the objectives, design, standards, and shared funding arrangements and negotiate (where applicable) with the relevant local governing bodies, including the relevant peak local government representative body.
  • Where the Commonwealth or state intends to impose a legislative or regulatory requirement on local government for the provision of a service or function, subject to exceptional circumstances, it shall consult with the relevant local governing bodies or peak local government representative body and ensure the financial implications and other impacts for local government are taken into account.
  • For its part, local government commits to sound public governance.
  • Further agreements on specific functions or services must address clear outcomes, clearly defined roles and responsibilities of each level of government, clear financial mechanisms, monitoring and evaluation processes and dispute resolution mechanisms.
  • The IGA will be reviewed and compliance assessed within five years. Disputes can be considered by the Local Government and Planning Ministers Council.
From the President

Today's historic IGA is but a milestone in local government's long march to fiscal sustainability. It's a very significant milestone, but a milestone nonetheless - not a destination. There are three points to be made. (1) The IGA applies to future arrangements, not existing ones. In other words, it does not right past wrongs. Reducing the burden of cost shifting will occur over time - not overnight. (2) The IGA paves the way to further bilateral or even trilateral agreements on the provision of specific services or functions. Negotiating these will not be easy. The hard yards lie ahead. (3) The IGA is not a fiscal panacea for local government and will not replace the need for fair funding arrangements to be secured from state and federal governments. In particular, we look to the federal government to replace financial assistance grants with a funding system that gives councils access to fair funding. We are asking for a mechanism that will provide us with a share of at least one per cent of Commonwealth taxation revenue. This would give councils access to funds that grow as the economy grows. The current escalation factor fails - and fails miserably - to keep pace with the real costs and demands faced by councils. ALGA will shortly commission a major economic study to strengthen our case for fair federal funding. This will be presented to the major parties later this year, well in advance of the 2007 federal election. ALGA has a triple F campaign for fair funding, fair treatment and formal recognition. Today's IGA helps to address the issue of fair treatment. In the coming months, a parliamentary resolution is expected to advance our case for formal recognition. While we are making progress on these two fronts, now is the time to press home our case for fair funding. Our communities need nothing less.

Cr Paul Bell AM

ALGA President

Six years in the making: IGA timeline
2000
ALGA lobbies for action on cost shifting.
2001
Australian Government commits to cost shifting inquiry.
2002
Parliamentary committee chaired by David Hawker MP asked to inquire into 'local government and cost shifting'.
ALGA submission calls for an IGA.
2003
Committee report - Rates and Taxes: A fair share for responsible local government - tabled in Parliament with bipartisan support.
Report recommends an IGA to counter cost shifting.
2004
Local Government Minister Ian Campbell holds roundtable meeting with local government associations and state ministers to discuss the report.
2005
Local Government Minister Jim Lloyd releases formal response to the report, commits to an IGA.
Working group with representatives from all three spheres of government commences work on a draft intergovernmental agreement.
Local Government and Planning Ministers Council formally agrees to continue development of draft IGA.
2006
LGPMC meets in Canberra on April 12 to consider and endorse IGA.


See also: www.alga.asn.au/iga

 

 

Please note there will be no edition of ALGA News on Good Friday.
LGPMC communiqué - extract

The Local Government and Planning Ministers Council noted the work that had been undertaken on the development of the Inter-governmental Agreement and thanked all contributing parties for their constructive input. The Council noted that the agreement is an historic event in relationships with local government and is the culmination of a process which began with the report of the House of Representatives Standing Committee on Economics, Finance and Public Administration - Rates and Taxes: A Fair Share for Local Government (the Hawker Report). The Council endorsed the objectives of the IGA which include providing for greater financial transparency between the three spheres of government in relation to local government services and functions. In addition, the agreement aims to improve the relationship by increasing consultation between governments on local government matters. The Agreement addresses cost shifting by obtaining in principle agreement from governments that when a responsibility is devolved to local government, local government is consulted and the financial and other impacts on local government are taken into account.
See also: LGPMC Communiqué

IGA: What it means for the public

The IGA is likely to be welcomed by all Australians as it expressly aims to:

  • Improve relationships between the three spheres of government by facilitating an open exchange of information and by encouraging greater co-operation.
  • Promote more effective and efficient government.
  • Provide greater transparency in the financial arrangements between the three spheres of government in relation to local government services and functions.
  • Ensure effective consultation with local government on the delivery of services and functions.
Notice
 
UCLG-ASPAC Liveable Cities Forum

Brisbane, 8-11 May 2006

ALGA President, Cr Paul Bell, is pleased to host Liveable Cities - the annual training forum for United Cities and Local Governments Asia Pacific (UCLG-ASPAC) on 8-11 May in Brisbane.

City scene

As Vice President of UCLG-ASPAC, Cr Paul Bell encourages all Australian councils to participate in the Forum.

UCLG ASPAC is the Asia Pacific regional body of United Cities and Local Governments (UCLG), the world organisation dedicated to promoting the values, objectives and interest of cities and local governments across the globe.

While the full meeting runs over four days, councils can participate in lively and informative sessions over one and a half days on the planning and management of liveable cities. In line with the United Nations Millennium Development Goals, UCLG last year launched the Millennium Towns and Cities Campaign, which focuses on eliminating poverty, promoting development and improving the living standard of their citizens.

Capacity building, training and research is one of the main activities of UCLG-ASPAC and the Liveable Cities Forum will give Australian councils the opportunity to meet with their international counterparts to exchange ideas and discuss their vision and strategies for our cities. The Forum will include fieldtrips in and around Brisbane - the host city.

Australian councils have demonstrated a keenness to create links with overseas councils and share our skills and knowledge and the Forum offers the opportunity to meet local government representatives from the ASPAC region to forge individual partnerships with our overseas neighbours. Delegates participating will be from the ASPAC sub-regional countries including China, Fiji, India, Indonesia, Malaysia, New Zealand, and the Philippines.

Registrations are now open. For further details please contact ALGA 02 6122 9436 or katie.whitehead@alga.asn.au