Local government to press for fair share of taxation revenue
4 February 2005
Reform of the financial relationship between the Australian Government and local government is desperately needed if Australia's 675 councils are to cope with increasing demand for services, the President of the Australian Local Government Association, Councillor Paul Bell, said today.
"Australian councils are attempting to cater to the needs of 21st century communities with an archaic federal funding model," Cr Bell said at the release of ALGA's Federal Budget submission for 2005-06.
"Local communities deserve a fair share of federal tax revenue to help pay for local services.
"We need to move away from the archaic system of financial assistance grants to a fair share - just one per cent - of national taxation revenue. We've seen financial assistance grants as a proportion of total Commonwealth taxation revenue drop from nearly 1.2% in 1993-94 to 0.8% today. By 2007-08, it's predicted to fall to just 0.77%.
"The need has been made abundantly clear with the release of the parliamentary report - Rates and taxes: A Fair share for responsible local government.
"Councils are faced with:
- escalating demand for social services
- increasing costs of maintaining and renewing local infrastructure, much of it reaching the end of its useful life
- widespread cost-shifting to councils by other spheres of government
- rapidly ageing populations, putting pressure on revenue and services
- lack of real growth in state and federal grants.
"Local government recognises and applauds the specific purpose assistance provided by the Australian Government for tasks such as local road maintenance through the much needed and much appreciated Roads to Recovery program.
"We also appreciate the support and commitment of the Federal Minister for Local Government, Roads and Territories, Jim Lloyd, and his determination to implement key recommendations of the Fair Share report. But we would also like to see progress on the broader financing question.
"We've seen reform of the financial relationship between the Australian and state governments. Now is the time to follow through and place the relationship with local government on a similarly fair and sustainable basis," Cr Bell said.
ALGA's Budget submission also calls for:
- Information technology
- $45m over four years to assist local government fully participate in joined up government and prevent a digital divide growing between the three spheres of government and to build on the achievements of the Networking The Nation program.
- Regional aviation
- $50m over three years to assist regional airports through implementation of key recommendations from the Making Ends Meet report.
- Urban transport
- $5m over four years for a pilot program of local government urban transport initiatives.
- Coastal zone management
- $28.8m over four years for an integrated coastal zone management program to help develop strong links between local government planning and regional natural resources management planning processes.
- Health initiatives
- $656.6m over four years for three health initiatives:
- Public health packages: $10m over four years for 25 public health packages to assist local government delivery of public health initiatives
- HACC: Increased funding for the Home and Community Care program ($635m over four years)
- Immunisation: an additional $11.6m over four years for local government immunisation services to reflect changes in the cost of delivering these services.
- Indigenous housing
- $100m a year over four years for Indigenous housing.
- Zonal tax rebates
- $500m over four years for changes to the zonal tax rebate to restore the real value of the rebates and meet its objectives.
- Regional infrastructure
- $200m over four years for new funding arrangements for a pilot program that initiates a new mechanism for funding regional infrastructure.
- Research
- $2m over four years to improve local government's research capacity.
Link: ALGA's Federal Budget submission for 2005-06.
