Fair Share Report: Key points summary
The Australian Government's response has four key components:
- Intergovernmental agreement on cost shifting
- Productivity Commission study on barriers to local government revenue
- Recognition of local government by both Houses of Federal Parliament
- Review of interstate distribution of the identified roads component of financial assistance grants
In addition, Jim Lloyd has committed the Australian Government - through the joint media release - to "explore opportunities to further develop partnerships with local government to the benefit of local communities".
There is no change to the fundamental arrangements for the Financial Assistance Grants methodology.
Generally, the response does not support a number of idiosyncratic recommendations in the Fair Share report eg expanding the role of the Australian National Audit Office.
1. Intergovernmental Agreement on Cost Shifting
There is in principle support for the IGA. The Commonwealth clearly indicates:
- desire to work collaboratively with state and territory governments (at the local government level) and local government on developing
- commitment to seek an agreed IGA with all spheres of government; and
- notes that it will need to be referred to COAG.
ALGA seeks a robust agreement with 'teeth' - ie has some measure of redress for local government if cost shifting takes place.
Preliminary work has already commenced on the IGA including federal, state and local government representatives. A report is due to be considered by the Local Government and Planning Ministers Council - of which ALGA is a full member - on 4 August in Melbourne.
Negotiating the agreement will be a complex task that will take some time - possibly 12 months or more.
2. Productivity Commission study of revenue options
The terms of reference for this Productivity Commission study will be important. The Minister says in the joint release that he will "work with ALGA" on the terms of reference. ALGA will argue that all revenue sources need to be examined - including the adequacy of Australian Government grants paid to local government. Broad terms of reference which look at the adequacy of all sources of revenue, including grants, should open the door for a discussion on 'quantum'.
3. Recognition of local government by Federal Parliament
ALGA sees this as a 'first step' towards constitutional recognition. The wording of the resolution could be important. The Minister has said that the resolution would be developed with ALGA.
4. Review of identified roads component of financial assistance grants to find long term solution to SA disadvantage under current formula
Last year, the Australian Government announced short term additional funding for South Australian councils in recognition of their disadvantage in the current formula used to determine the identified roads component of financial assistance grants. ALGA argues that no council should receive less money as a result of this review.
