Local government needs fair federal funding to cope with ageing population
12 April 2005
Local government needs access to fair federal funding if it is to properly provide for the needs of an ageing population, the President of the Australian Local Government Association, Councillor Paul Bell, said today. He was responding to the release today of the Productivity Commission's report on the economic implications of an ageing Australia.
"The report makes it clear that as the population ages, local government will face serious budgetary pressure as it struggles to keep pace with increasing demand for human services," Cr Bell said.
"Half of local government expenditure is now related to the provision of human services, such as welfare, housing, health, community amenities, recreation and culture.
"As people live longer, the high cost of supporting them in their last few years will have a significant impact on Australia's 673 councils, particularly as many of the 'healthy ageing' approaches lie outside health funding and increasingly fall on the shoulders of local government.
"The Productivity Commission report finds that:
- ageing will place increasing pressure on council expenditure
- there is likely to be an emerging fiscal deficit for local government under current policy settings
- Federal financial assistance grants are unlikely to represent a source of revenue growth that would offset any increased spending associated with ageing
- some areas are likely to face significant pressure on infrastructure planning and provision
- local government rate revenue - its only source of taxation revenue - will come under pressure from the increasing proportion of pensioner households
"The report strongly underscores ALGA's case for reform of Federal-local government financial relations.
"We need to move away from the archaic system of financial assistance grants to one that provides local government with a fair share of national taxation revenue. We are seeking access to one per cent of national taxation revenue.
"We will continue to work closely 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," Cr Bell said.
