Speeches: 2004
National local government priorities in 2004 - LGAQ
In recent years, councils have acquired new responsibilities including management of health, alcohol and drug problems, community safety and accessible transport. And we're playing a growing regulatory role in areas such as development and planning, public health, and environmental management. Like a hungry caterpillar, these new services are now gobbling up the expenditure once reserved almost exclusively for traditional services and infrastrucutre maintenance.
Address to LGAQ Annual Conference
Councillor Mike Montgomery
President, Australian Local Government Association
1 September 2004: Mackay, Queensland
The challenge ahead
- Cr Paul Bell
- LGAQ Executive Members
- Mayor of Mackay, Julie Boyd
- Delegates
It's terrific to be here in Mackay,a very beautiful, industrious and warm part of Australia.We are, of course, in the heart of sugar, coal and cattle country. Many Australians also know Mackay as the gateway to the Great Barrier Reef.
By Australian standards, the City of Mackay is a large municipality.
- It services a population of around 80,000
- It covers more than 2,800 square kilometres
- It has an annual expenditure in excess of $70 million and services - I was surprised to discover -a number of islands such as Lindeman, Brampton, Keswick and St Bees
Issues of economic development are clearly important to Mackay and the surrounding region. But so too are social issues. I was pleased to see a number of initiatives lisited on the council's website to celebrate seniors week. These included free workshops to help seniors learn more about computers, the internet and digital media. There was also an interactive forum organised to bring young people and senior citizens together to share their views and perceptions of each other. It the session was aptly labled - Wrinklies and Hooligans. I'm not sure which category I would fall into - possibly both. But I mention this to highlight the great diversity of issues and challenges that face local government today.
The range and diversity of services provided by local government - and demanded by our residents - continues to grow at great rate. We are there, hiring out baby capsules when you're born. And we've got your grave plot ready when you die.
In recent years, councils have acquired new responsibilities including management of health, alcohol and drug problems, community safety and accessible transport. And we're playing a growing regulatory role in areas such as development and planning, public health, and environmental management. Like a hungry caterpillar, these new services are now gobbling up the expenditure once reserved almost exclusively for traditional services and infrastrucutre maintenance.
In the 1960s, around 50% of local government expenditure was allocated to the maintenance of roads. By the 1990s, this had fallen to just over 25%. In the early 1960s, just 4% of expenditure was allocate to education, health, welfare and public safety activities. By the late 1990s, this had risen to 12% - a threefold increase. And while local government is catering to the needs of 21st century commuities - connecting people to the internet - driving economic development - working in partnership at a regional level of issues such as transport and communications - we're still caught in a 19th century time-warp when it comes to our financial relations with state and federal governments. Which brings me to the national agenda for local government.
Last year, ALGA set three major goals:
- renewing Roads to Recovery
- tackling cost shifting
- getting a fair financial deal from the Australian Government
There has - of course - been plenty of movement on the roads front. In January, the Deputy Prime Minister, John Anderson, announced the renewal of the Roads to Recovery program after a long and sustained lobbying campaign by local government. And here I'd like to thank LGAQ and all Queensland councils for your participation and strong support for the renewal campaign.
Roads to Recovery is - of course - an outstanding example of a federal - local government partnership, producing real and lasting benefits for all Australians, from our city centres to remote communities. Renewal means a further $1.2 billion will be allocated to councils to help address the backlog of maintenance work. As you know, the renewed program will encompass some changes.
Of the $300m allocated to councils each year, $200m of will be paid in the same way as occurs with the current program. The remaining $100m will be allocated to local government for projects of regional importance.
This funding will apply to regional and outer metropolitan areas to - and I quote from the AusLink white paper - enhance the ability of regional industry and communities to compete in the national and global marketplace. ALGA and state associations have been concerned about the way the Australian Government wants this to operate. The Australian Government said that it would not allocate funds on a regional or state by state basis. They did, however, say the funds would be - and again I quote from the White Paper - 'fairly distributed'. This outcome was not a welcome one.
ALGA and state associations have made our opposition to national allocation of these funds clear. We want regional or, at least, state-based allocations of this $400m pool. Since the White Paper was released in June, we have been given some comfort by the comments of the then Minsiter for Local Government and Roads, Senator Ian Campbell. He told the National Local Roads Congress last month that he had no problems with nominal state-based allocations.
While no formal decision has been taken by the Australian Governemnt, we have discussed this issue with Senator Campbell's success, Jim Lloyd, and it is clear he is of a similar mind. We have recently written to both the new Minister seeking a positive and early statement on how the strategic component will operate. We have pressing the his department for clear details on the process that it will undertake to finalise the strategic component guidelines and what further consultations with local government will take place, as promised by a number of ministers over the past two or three months.
You don't have to be Einstein to see there are some differences of opinion within the Australian Government on how this strategic pool should operate. But from our perspective, this pool must be fairly divided at least on a state-by-state basis, if not a regional basis. We want to see this issue settled to local government satisfaction well before the election is called.
Many of you will recall that Labor got something of a drubbing prior to the last federal election for its failure to make a clear commitment on Roads to Recovery and the future of the Blackspot road safety program. This time around, Martin Ferguson has made a clear and early commitment to also renew both the Roads to Recovery and Blackspot programs. He has also flagged a more flexible approach to Roads to Recovery. He wants to allow councils to become involved in partnerships with other spheres of government and the private sector and believes this could be used to lever additional funds of up to $200m a year for transport projects. He also wants to see broaden the range of transport projects that can attract Roads to Recovery funding, including park and ride facilities, cycling trails, regional airport runways, freight terminals and even railway crossings.
Some councils will undoubtedly see this as attractive, although you can argue that the purpose of the program is first and foremost to address the local road maintenance backlog. There is - of course - nothing like a tight federal election to place a spotlight on the issues that matter most. Transport is one of these.
We hope that future federal funding arrangements for local government will also get significant attention. For ALGA, cost-shifting and reform of financial relations are our top priorities. Again, there have been very significant developments. Most importantly, the report of the Hawker inquiry into cost shifting was brought down in Federal Parliament during the National General Assembly last November.
David Hawker's Fair Share report represents a once in a generation opportunity to secure a stronger role for local government as an equal partner in the Australian system of government. Both the title and the substance of the report reflect our case for an end to cost shifting through the development of intergovernmental agreements and an overhaul of federal funding arrangements. Let me outline the key developments since last November.
The first opportunity to test the commitment of state governments to the reform process came in February when the Local Government and Planning Minsters' Council met here in Perth. The ministers agreed to provide the Australian Government with responses to the Fair Share report and aimed to do so by the end of March. They also agreed to convene a roundtable with local government leaders to discuss the report. In the event, state responses were much slower than anticipated and the roundtable - originally planned for April - was convened in Canberra in June.
The roundtable - despite a somewhat frosty start - actually made solid progress. We told the the ministers that we can no longer do business as usual. Local government needs a basis to negotiate mutually agreed outcomes with funding agreements on service provision. We also need a strong and robust intergovernmental framework that assists us all to work together in a fair and equitable way. The roundtable agreed that the way forward must be to progress a high level intergovernmental agreement to address the key issues raised in the Fair Share report.
Work will now commence on the joint development of an IGA proposal for further consideration by local government and planning ministers at their next meeting. A working group - which will include representatives from ALGA and the state and territory local government associations - is being established to further develop ideas for the proposed inter-governmental agreement. It will also examine potential reforms of the current financial and administrative arrangements between the three spheres of government.
We have had - as you know - another change in Minister. Ian Campbell was a strong advocate for reform. But - having met Jim Lloyd - I'm confident that we have a minister who is equally passionate about getting the job done. Importantly, David Hawker is still on the case and is as keen as we to see change occur. One thing which will have an impact on the Australian Government's formal response to the Fair Share report is the Federal election. This means we are likely to see the formal response to the Fair Share report in the form of election commitments, rather than formal responses in Parliament. Ian Campbell was personally overseeing the development of the Coalition's local government policy. That, of course, is now in the hands of Jim Lloyd.
The Opposition spokesman on local government, Darryl Melham, has carriage of Labor's policy. We will, of course, have to wait for the formal announcement of their policies to see just how far they are prepared to go to meeting the needs of local government. However, one thing's for sure. The bipartisan nature of the Hawker inquiry lends itself to a significant response from both sides.
Now, I am sure we will not see a commitment from either side to provide local government with immediate access to a fair share of national taxation revenue. That is something that will need more time. But I am convinced that we have a rare opportunity to drive the agenda for change. The case for change has been made in spades by local government and ALGA. This has been reflected by Hawker.
Once the election has come and gone, we will need to mobilise local government across the country in a Roads to Recovery-style campaign, to ensure the momentum for change is continued. We will - again - need to turn the backbenchers into our strongest advocates. By working with them - not against them - we can secure change that will provide us with access to growth funding that will place local government on a more stable and secure financial footing. With such a strong economy, with such strong prospects for the future, surely now is the time to drive forward with the unfinished business of the tax reform agenda.
Let's give local government the same deal given to the states under the new tax system - do away with the archaic system of financial assistance grants and replace it with access to a fair share of national taxation revenue. There should now be no impediment for freeing local government from its fiscal shackles and giving councils a fair go. Our communities deserve nothing less.
It's the glory of the Australian federation - a bizarre, creaky and unpredictable machine that every so often will produce something, somewhere that matters to someone.
Thank you.
Mike Montgomery
Mackay, Queensland
1 September 2004
