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R2R funding until 2014, green light for Strategic Regional Program

ALGA President Cr Paul Bell has described the 2007-08 Budget as "an excellent outcome for local government."

"Representations by ALGA and local government have been successful in increasing funding and providing local government with funding certainty for the next 7 years to 2014," he said. Cr Bell was briefed by the Minister for Local Government, Territories and Roads, Jim Lloyd, on Wednesday, on the Budget benefits for local government.

In total the Budget has delivered about $2.5 billion for local government:

  • an immediate allocation for the Strategic Regional Program ($250 million);
  • extending the Roads to Recovery Program by five years ($1750 million);
  • extending the Strategic Regional Program ($300 million); and
  • extending the Blackspots Program ($350 million)

The commitments in the Budget mean that by 2014, 14 years after it commenced, some $4.0 billion will have been provided for local roads under the Roads to Recovery and the AusLink Strategic Regional Program.

Strong representations on local airport funding has also resulted in a new program totalling $22 million to fund remote and isolated airstrips and $24 million for the continuation of the subsidy to regional airlines for air traffic control charges

AusLink 2

The Government announced, as had been foreshadowed, the extension of the AusLink Program, known as AusLink 2, from 2008-09 to 2013-14. The government will provide $22.3 billion under AusLink 2 - a 41% increase over the current program. No new projects were announced in the budget so expect to see a plethora of projects to be funded from these AusLink funds announced in the lead up to the Federal election.

Roads to Recovery

AusLink 2 provides for the continuation of the Roads to Recovery Program to 2013-14 with total funding of $1750 million. The funding is increased by 14% from $307.5 million per year to $350 million from 2009-10 to offset the rising cost of road construction. The Roads to Recovery funds will continue to be distributed directly to councils according to formulas set by the local government grants commissions in each state.

AusLink Strategic Regional Program

The AusLink Strategic Regional Program will also be continued under AusLink 2 with $300 million being available over the five years. The funding will be allocated following calls for new applications for funding. The extra funding will be allocated in two $150 million funding rounds to be held in 2009-10 and 2011-12.

As a short term measure the Government is providing an additional $250 million to be paid by 30 June 2007. The Government will announce successful projects shortly and councils will be expected to sign funding agreements and be paid by 30 June 2007. This is a very short time frame in which to undertake the necessary negotiations of the funding agreements. Councils that submitted bids should be reviewing those bids, particularly funding arrangements so that if their project is selected they can move quickly with the negotiations.

Blackspots Program

The Blackspots Program is being extended for 6 years from June 2008, when the current program ends, to June 2014 under the umbrella of the AusLink 2 Program. Funding for the program will be increased by 33 percent from $45 million per year to $60 million per year starting in 2009-10. In total $345 million will be made available over the 6 years from June 2008 to June 2014.

The Program will continue to fund relatively low cost safety works such as roundabouts, crash barriers and street lighting at places where there have been serious crashes or where serious crashes are likely to occur. The Australian Government however has announced it will update the state/territory shares of the funding to reflect more up to date population and accident figures.

Budget Overview

Financial Assistance Grants (FAGs) to local government will increase in 2007-08 to $ 1,749 million (consisting of $1,211.7 million General Purpose Grants and $537.7 million in local roads grants). This is estimated to be $65.2 million above the current financial year, and a nominal increase of 3.9%.

Total direct funding for local government in 2007-08 will be $2,306 million. This includes FAGs, Roads to Recovery and other Specific Purpose Payments (SPPs).

This is in the context of a Federal Budget surplus of $10.6 billion.

The Government is to fund roads and transport through a renewed Auslink program valued at $22.3 billion over five years.

Additional initiatives included in the budget include:

  • $10 billion water plan for the Murray-Darling Basin.
  • $2 billion for the renewal of the Natural Heritage Trust
  • Increased rebate of up to $8000 for households installing solar panels.
  • From 1 July 2007 rates of Childcare Benefits to increase by 10 per cent on top of indexation.
  • $1.6 billion for aged care initiatives.
  • Extended funding for drought relief.
  • Personal income tax cuts.

Labor's Budget Response

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"This Budget presented the Treasurer an ideal opportunity for the Howard Government to support local communities where they need it most through a Local Community Infrastructure Renewal Fund - but he missed it," - The Shadow Minister for Local Government, Senator Kate Lundy

"Federal Labor is committed to the black spot road safety program which is producing real results and saving lives on Australian roads. We will also retain the Strategic Regional and Roads to Recovery programs, subject to strict and transparent criteria." - Shadow Minister for Transport, Roads and Tourism, Martin Ferguson

"This Budget fails to deliver the reform of federal/state relations that has been identified as necessary by a wide variety of individuals, organisations and committees. In the lead up to the election Labor will be offering a reform of the architecture and operation of federal state relations to reduce inefficiency, duplication, and the opportunity for blame shifting and cost shifting, particularly given the public's desire to clarify responsibilities and end the blame game." - The Shadow Minister for Federal/State Relations Bob McMullan

This year's Budget had some welcome initiatives for regional Australia. But it will not secure a sustainable future for our regions. The Budget's failure to connect the regions to high speed broadband demonstrates the Government is not committed to build capacity in our regions and equip them for the future." - The Shadow Treasurer for Trade and Regional Development, Simon Crean

"Federal Labor's National Water Security Plan for Towns and Cities will ensure Australia urgently deals with our worst water leaks and losses. Under the plan, a Federal Labor Government will invest $250 million - in matching funds to work in partnership with government and local water authorities to minimise water loss; invest in modern, more efficient water infrastructure and - where appropriate – refurbish older pipes and water systems; and provide funding for practical projects to save water." - Shadow Minister for Infrastructure and Water, Anthony Albanese

"I believe budgets should not be about the next election. They should be about the next decade. They should reflect the ambition we have for our nation's long-term future... A Labor Government will implement a $2.5 billion Trades in Schools program over ten years to build new Trades Training Centres and upgrade existing facilities and equipment in all of Australia's 2650 secondary schools – both government and non government. This will mean an investment of $729 million spread over the four years to 2010-11." - Federal Labor Leader, Kevin Rudd

Fight for Local Infrastructure Fund turns to election

ALGA will pursue the Local Community Infrastructure Renewals Fund (LCIRF) in the forthcoming Federal Election ALGA President Cr Paul Bell said after its omission from the Budget.

"Local government is facing an infrastructure backlog of $14.5b nationally. A LCIRF would focus on renewing and replacing community infrastructure such as community centres and public halls, swimming pools, walking tracks, ovals and playing fields, libraries and tourism information centres," he said.

"Investing in upgrading community infrastructure will improve the health and well-being of communities and, in many cases, act as a catalyst in the rejuvenation of local economies. Our attention must now be focused on making the Fund a reality in the election commitments of both major parties.”

Cr Bell urged councils to continue registering their ideas for projects which could be funded through the LCIRF on the ALGA website's Local Community Infrastructure Ideas Register.

"The Register is an invaluable tool in ALGA's advocacy for the Fund which allows us to highlight to Federal Parliamentarians what the Fund would mean at the local level. We now have almost 160 ideas on the Register but we will need many more if our fight for the Fund over the coming months is to be successful."
From the President

After several sleepless nights leading up to the Budget, I was delighted at the result. What we got was the largest single commitment to local roads in any Budget ever delivered – the Australian Government's commitment of $2.5 billion to local roads and the fact that Roads to Recovery has become a virtual fixture with funding guaranteed until 2014.

There is no doubt that this is a Budget bonanza for local roads and communities around the nation will benefit. The result is a tribute to the hard work of ALGA in terms of chewing off the ears of decision-makers and mounting a strong case for continued funding with the assistance of State Associations. It is also testament to the fact that councils across the nation have proved that local government can deliver well-targeted, efficient and cost-effective services and programs.

The morning after the Budget I met with the Minister for Local Government, Territories and Roads, Jim Lloyd, to confirm details of the funding and thank him for his efforts in pushing the case for local government.

Local government especially welcomes the $250 million for the AusLink Strategic Regional Program made available immediately. The initial program was over-subscribed by more than a billion dollars and this additional funding goes some way to meeting this enormous unmet demand for economic infrastructure in regional areas.

I have been asking the Government for additional funding for these projects and I now urge councils that have projects selected for funding to move quickly to settle funding agreements with the Australian Government so that funds can be released.

Of major significance are the longer term commitments from the Federal Government to community transport infrastructure through the $1750 million for the Roads to Recovery Program over the 5 year period of AusLink 2 and the $300 million for the Strategic Regional Program over the same period.

Roads to Recovery is a highly successful program which, along with the Black Spots Program, has enhanced community safety and boosted economic development in regional economies over the past seven years. ALGA has been working closely with the Government to ensure its continuation and this announcement virtually ensures the program will be a permanent fixture in future Budgets.

Also of note are the announcements supporting air services regional and remote and remote communities. The new program worth $22 million over 4 years will greatly assist those communities that are having difficulties maintaining their airstrips to safe standards. The continuation of the Enroute Charges Payment Scheme by another 4 years will also assist regional communities by keeping the cost of their air services down.

The Budget was a great fillip for the local communities we serve and represent. But, rest assured, we will not rest on our laurels. The Local Community Infrastructure Renewals Fund (LCIRF), as recommended by the recent PricewaterhouseCoopers report into local government financing, is an important initiative which local government will continue to push for in the lead-up to the election campaign. To underpin our case, please submit your examples of infrastructure in urgent need of renewal onto the Community Infrastructure Ideas Register. We now have almost 160 entries and they are still flooding in. Thank you and keep them coming!

ALGA's full Budget analysis is available on the ALGA website: www.alga.asn.au

Cr Paul Bell AM
ALGA President

Childcare

There were a number of announcements in the budget relating to the childcare sector that will be of interest to many local communities.

Changes to payment structures such as the 10% increase in the childcare benefit, and the availability of the 30% rebate to families are positive outcomes for communities across Australia.

The child care sector will also benefit from a number of other initiatives including an additional $71 million over five years for the Inclusion Support Subsidy program, which will allow 3000 extra children with high support needs to access child care each year.

Other announcements will provide benefits to rural and regional Australia, such as the $43.8 million (over four years) for regional and remote childcare services including $1.9 million (over four years) for a program providing $5,000 grants for new carers to make their homes suitable for family day care.

Family day care will also benefit from $5.1 million (over four years) for Network Support funding for family day care services to support the new carers, including an increase in in-home care places in rural and remote areas.

Measures to integrate long day care, family day care and outside school hours care into one Child Care Quality Assurance system, and to create a national cross-jurisdictional taskforce to examine a national approach to quality assurance and regulation for early childhood education and care were also funded.

In another positive for regional Australia a budget of $23.5 million over four years has also been allocated to create 20 new child care service hubs in regional and remote communities with high indigenous populations. These facilities will have the primary role of providing childcare services, however they will also link to other early childhood services.

Health and Ageing Initiatives

The 2007-08 Federal Budget has placed a significant emphasis on addressing chronic disease in the community and to improve health services for those most in need.

Of particular interest to local government is the announcement of a package of measures to improve nutrition and encourage physical activity, including after school programs. A total of $150 million has been allocated over 4 years in recognition of the links between being overweight or obese and chronic diseases including diabetes, heart disease and stroke. A budget of $103.5 million over four years was also announced to address the growth in type 2 diabetes.

A number of allocations towards the implementation of immunisation programs were announced as part of the budget including $51.4 million towards the National Immunisation Programme - Human Papillomavirus and $2.3 and $7.5 million respectively to the rotavirus and Q fever vaccine

There were also a number of positive announcements for rural and regional Australia, including $156 million over 5 years for the Royal Flying Doctors Service and $65 million to establish a new regional dental school at Charles Sturt University in New South Wales and $8.6 million for the Visiting Optometrists Scheme.

The Rural Retention Program will also be continued with increased funding at $9.6 million over five years, and the rural womens GP Service has had a budget allocation of $ 4.3 million over 5 years to continue to address the provision of medical services in rural communities.

Programs announced under the "Exceptional Circumstances" package will also increase the amount of funding available for counseling for those in rural and regional areas affected by drought.

The budget also announced a number of initiatives in the area of Indigenous Health & Welfare including a $ 239 million package (over 5 years) including financial assistance, scholarships, training and employment opportunities for Indigenous youth from rural and remote areas. Indigenous child care and early childhood support services will also receive $46 million over four years and early intervention and family based health initiatives will receive $149 million over four years.

Reforms to Indigenous were also included with a package including construction of new houses and an expanded repairs and maintenance budget for existing housing in remote areas funded to the tune of $294 million over four years. On the Aged care front, the 2007-08 Budget sees the continued implementation of the “Securing the Future of Aged Care for Australians” initiative of the Australian Government.

Many of the initiatives are aimed at improving the quality and regulation of aged care, in addition to increasing the availability of a range of aged care solutions through initiatives such as the provision of $582.3 million over five years to support increased investment in aged care homes.

The Government will also provide a special capital subsidy to aged care providers of $3.50 per day for each high care resident during the transition period of 1 July 2007 to 19 March 2008, at a cost of $96.0 million.

The Government has also announced the provision of $298.6 million over five years to increase the number of community care packages from the current 20 places per 1,000 people aged 70 years and over, to 25 per 1,000 in 2010-11. This will result in an additional 5,600 Community Aged Care Packages and 1,600 Extended Aged Care at Home Packages provided over four years, aimed at increasing opportunities for older people to continue to reside in their own home for as longer.

The introduction of a new Aged Care Funding Instrument to replace the existing Resident Classification Scale from 20 March 2008, will also of interest to many local Councils and communities.

For further information visit www.alga.asn.au

State of the Regions report 2006-07
Environmental spending

Local government welcomes the Government's continued commitment to fund the National Heritage Trust. The government announced an additional $2 million over 5 years from 2008 – 09 to continue the Natural Heritage Trust (NHT) and the National Action Plan for Salinity and Water Quality (NAP). To be known as Phase 3 of the National Heritage Trust, the program will build upon the $3.1 billion that has already invested through the program since it was first introduced in 1997. As in previous years the Australian Government will be inviting state and territories to contribute matching funding for this program. This funding announcement will ensure that key stakeholders including regional groups and local government will continue to have the opportunity to progress their NRM plans and projects until at least 2014.

The Budget provides a little more detail on the previously announced $10 billion for the National Plan for Water Security. The Budget major programs include:

  • $3.1 billion over 10 years to address the over allocation in Murray-Darling Basin by buying water entitlements and providing structural adjustment assistance to those in unviable or inefficient irrigation areas. Funding is conditional on governance arrangements for the Murray-Darling Basin;
  • $5.9 billion over 10 years for the National Plan for Water Security. This includes $4.4 billion over six years from 2011 – 12 to improve water use and efficiency. Specific components of this include:
    • $3.1 billion for improving delivery systems efficiencies. These measures will, in collaboration with irrigation water providers identify water loss 'hot spots' and undertake target works such as piping, channel lining and system automation in irrigated areas;
    • $1.6 billion to improve onfarm irrigation;
    • $617 million to improve water metering monitoring and accounting;
    • $500 million for practical projects to improve water efficiency and effectiveness of river operations and storage in the Murray-Darling Basin; and
    • $417 million over 10 years for the Bureau of Meteorology to improve the detail and scope of nationally available water information, which will allow the Bureau to forecast, analyse and publicly report on water resource usage.

In relation to climate change local government notes the Governments commitment of $126 million over 5 years or an Australian Centre for Climate Change Adaptation and $103 million over 4 years for CSIRO Climate Adaptation and Energy Research Flagship. It is hoped that the work of these groups will assist local government better understand the issue of climate change and solutions to the many challenges resulting from global warming.

Local government also note and welcome the expansion of the Photovoltaic Rebate Program which provides rebates for the eligible photovoltaic systems. The Government will provide $150 million over five years. Under the expansion, existing household rebate rates and caps will be doubled from the current level, such that rebates of $8 per peak watt up to $8000 will be available to households.

Local government looks forward to further environment initiatives, in particular climate change, following the report by the Prime Ministerial Task Group on emissions trading and in the lead up to the 2007 federal election.

Skilled migration intake to rise

The number of skilled migrants coming to Australia will rise this year as the government tries to prevent skills shortages from becoming a brake on the economy.

Australia's skilled migrant intake will increase by 5,000 - more than five per cent - to 102,500 in 2007-08.

Immigration Minister Kevin Andrews said the increase in migrants with workforce and English language skills would address skills shortages and support economic growth.

"This year's migration program continues the Australian government's focus of keeping the economy strong by keeping pace with the demand for skilled labour and ensuring we have a cohesive, integrated community," he said.

The government will also spend $85 million to stamp out abuse of Australia's temporary skilled migrant worker scheme.

The Budget allocates $124 million over five years to pay for the Australian citizenship tests, expected to be rolled out closer to the election.

Indigenous programs

The 2007-08 Indigenous Affairs Budget contains 26 initiatives involving $815.7 million in new and extended funding over five years focused on remote housing, early childhood, new education opportunities, health and economic independence. These measures have a net fiscal balance impact of $748.3 million. This will take total spending on Indigenous specific programs to a record $3.5 billion in 2007-08.

Overcrowded housing in Indigenous communities is a major contributor to social problems, poor health and low school attendance. The Community Housing and Infrastructure Program (CHIP) will be scrapped in July 2008 and replaced by the Australian Remote Indigenous Accommodation (ARIA) Program with additional funding focused on land tenure reform, mainstream public housing, private home ownership and better value for money.

In other practical measures to offer Indigenous people pathways to a better future, the Australian Government is backing an initiative of the National Indigenous Council to provide new opportunities for high quality education by providing more boarding school places for young Indigenous Australians from regional and remote communities.

More than 1600 young people living in remote areas will be able to study away from their home, with more boarding accommodation available in regional centres. The successful Indigenous Youth Mobility Programme will be expanded from 640 to 1500 places and the Indigenous Youth Leadership Programme will be expanded from 250 to 1000 places. One thousand more scholarships for higher education will be created and ABSTUDY entitlements enhanced to better support study away from home.

The Budget provides extra resources for home health visits for children aged 0-8 in remote areas, better access to child-care and playgroups, and funding for research on childhood health and development. Extra funding is provided to strengthen Indigenous primary health care services and for projects to address the misuse of alcohol and other drugs.

The Budget also provides measures to build on reforms commenced last year for the Community Development Employment Projects (CDEP) programme. More than 800 positions supporting government services through CDEP will be converted into paid employment at a cost of $97.2 million over four years.

Enroute Air Traffic Control Charges

The Australia Government also announced in the Budget the continuation of its subsidy of the enroute air traffic control charges paid to more than 35 regional airlines and operators. $24 million will be paid over the next four years including $6 million in 2007-08.

Remote and Regional Airstrips

The Budget included a very welcome provision of $22 million over the next four years ($1.5 million in 2007-08) to improve the safety at up to 300 airstrips in remote and isolated areas of Australia. These are airstrips previously owned by the Commonwealth and handed over to local government. This funding recognises the importance of air services to remote and isolated communities and the reality that these communities do not have the financial capacity to properly maintain these airstrips.

The funding will be available on a competitive basis for airstrips that:

  • receive weekly air services under the RASS scheme or are eligible to receive air services under the scheme; or
  • would be eligible to receive RASS services if the airstrip was upgraded to meet the scheme’s safety standards; or
  • need a better airstrip to support the operations of the Royal Flying Doctor Service.
Local government financial assistance grants(1), 2007-08

The Commonwealth Grants Commission's Report on the Review of the Interstate Distribution of Local Road Grants is available here

  General Purpose ($M) Local Roads ($M) Total ($M) Increase (2) %
NSW 403.1 156.0 559.1 3.9
VIC 299.4 110.9 410.2 3.9
QLD 237.1 100.7 337.8 3.9
WA 120.2 82.2 202.4 3.9
SA(3) 91.6 29.5 121.1 3.9
TAS 28.9 28.5 57.4 3.9
NT 12.1 12.6 24.7 3.9
ACT 19.4 17.2 36.6 3.9
Total 1,211.7 537.7 1,749.4 3.9
Quote of the week

"The government's view of the economy could be summed up in a few short phrases. If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it"
Former US President and Hollywood actor Ronald Reagan