Local government will struggle to cope with ageing population
25 November 2004
It is now abundantly clear that local government will struggle under current funding arrangements to properly provide for our ageing population, the President of the Australian Local Government Association, Mayor Rae Perry, said today.
She was responding to the release today of a Productivity Commission draft research report on the economic implications of an ageing Australia.
"An ageing population and demographic change will have different impacts in different areas. But much of local government will face serious budgetary pressure as it struggles to keep pace with increasing demand for human services while attempting to maintain and develop traditional services, such as road and infrastructure maintenance," Mayor Perry said.
"In fact, 49% of local government expenditure is now related to the provision of human services, such as welfare, housing, health, community amenities, recreation and culture.
"The Productivity Commission report finds that:
- ageing of the population will place increasing pressure on local government expenditure
- there is likely to be an emerging fiscal deficit at the local government level under current policy settings
- the number of pensioners - and pensioner rate concessions - is projected to increase significantly resulting in a lower rate base - local government's only source of taxation revenue
- local government revenue is unlikely to increase at a greater rate than the growth in GDP and some components - such as Federal financial assistance grants to local government - will grow at slower rates
"The report strongly backs ALGA's case for reform of Commonwealth-local government financial relations. We need to move away from the current system of financial assistance grants to one which provides local government with a fair share of national taxation revenue."
"We're working with the Australian Government to help prepare communities for an ageing population and, as a full member of the Council of Australian Governments, look forward to discussing this report in detail with the Prime Minister, Premiers and Chief Ministers," Mayor Perry said.
