Speeches: 2004
The post-election environment
The election would - at long last - require the major parties to detail their respective responses to the Fair Share report on cost shifting and local government financing. Until the election was called, neither party had formally responded to the report, now nearly a year old. Secondly, this election was - for many months - shaping up as a very tight contest. And a very tight contest is not only good for democracy - it also represents an important window of opportunity for those who seek a better deal from the federal government.
Address to the LGANT Annual Conference
Councillor Mike Montgomery
President, Australian Local Government Association
13 October 2004, Darwin
- President of the Local Government Association of the Northern Territory, Councillor Fran Kilgariff
- LGANT Executive members
- Conference delegates
Thank you for having me here in the Territory - it's great to be back here to discuss some of the core issues facing local government just a few days after the federal election. When I addressed you last year, I said the outcomes of the federal election would be important for the future of local government. There were a couple of reasons for this.
The election would - at long last - require the major parties to detail their respective responses to the Fair Share report on cost shifting and local government financing. Until the election was called, neither party had formally responded to the report, now nearly a year old.
Secondly, this election was - for many months - shaping up as a very tight contest. And a very tight contest is not only good for democracy - it also represents an important window of opportunity for those who seek a better deal from the federal government.
ALGA has been right up there for some time, making the case for a better deal for local government. Our case is presented in ALGA's Blueprint for Building Better Communities - a document formally welcomed by both Labor and the Coalition. This document was formally launched on the very first day of the election campaign. The Blueprint - of course - came as no surprise to the major parties. It sets out a number of policy priorities that have been pursued by local government for some time.
First and foremost, the Blueprint makes the case for major reform of the Commonwealth financial relationship with local government. We called for access to a Fair Share of Commonwealth taxation revenue to place local government on a sound and secure financial footing so we can serve the needs of our communities into the 21st century and beyond. We also called for stronger partnerships with local government, where local government is treated as a equal and valued partner.
We called for long term financial support for our local roads and for local government to be closely engaged in AusLink planning and decision-making forums. We called for a significant boost for regional development in line with a 10 point plan outlined by ALGA earlier this year. This includes support for infrastructure and transport, regional airports, the development of enterprise zones and support for regions with shortages of health professionals.
We called for further assistance to enhance councils' use of information technology. We called for better involvement of councils in national environmental programs. And we called for Constitutional recognition to secure the rightful place of local government within the Australian federation once and for all.
The case for a better financial deal is clear. At present, local government receives financial assistance grants from the Australian Government, which are indexed to CPI and population changes. But they do not reflect the real costs of providing services and meeting increasing community demand for human services, such as aged care and youth services, public safety and child care.
Councils need access to growth funds if we are to meet the challenges of the 21st century. The financial pressure faced by local government has been well documented in the Fair Share report on cost shifting and local government financing tabled in Federal Parliament last November. It tells a story of a sphere of government that has been under-funded and under-valued for far too long.
That report is now almost a year old and we have looked to the major parties to respond in a positive way during the course of the federal election campaign. We are now at the end of the campaign. The Coalition has been returned for a fourth term. What commitments have we secured from the Coaltion? What can we expect in the coming three years? I want to make some general comments and then look at the Coalition's specific policy commitments. But first I would like to very publicly thank a number of federal politicians who have put in the hard yards for their parties, for their constituents and for local government generally.
It's not often that federal politicians get thanks - but we in local government are fortunate to have a large number of strong supporters in federal parliament who genuinely believe in the role and services provided by local government. In particular, I'd like to thank the Deputy Prime Minister, John Anderson. He has been passionate about the future of this country, he has been passionate about our communites and he has been passionate about our infrastructure. He has delivered for local government - and delivered in spades. In particular, he has delivered more than $2.5 billion for our roads through Roads to Recovery Mark I and II.
I'd also like to thank Jim Lloyd who - as local government and roads minister for only the past four months - has come to grips with this complex and multifaceted portfolio in double quick time and delivered a policy that will take us forward to address the critical questions of cost shifting and reform of our financial relationship.
I also thank Labor's Martin Ferguson, who has very ably handled a range of important portfolios for local government, including transport, infrastructure and regional development. Martin has been a strong supporter of local government. He has - without fail - participated at ALGA conferences and major events. He has actively engaged local government in policy discussion. And - while we haven't always agreed - he has always listened. You really can't ask any more than that. I'm sure he will continue to be a leading member of Labor's front bench team and I look forward to working with him into the future.
I'd also like to thank Daryl Melham who has, for the past 10 months, been the shadow minister for local government. The first thing he did was to come to ALGA to hear of our issues and concerns first hand. His door has always been open and we thank him for that.
There are many others, of course, who are strong supporters of local government and we look forward to working with the new parliament when it sits next month. So, what will change for local government?
Perhaps the most important dynamic for local government is the growing chasm that has emerged between the premiers on one side, and the Prime Minister on the other. The Prime Minister has not been impressed by the tactics of the premiers, particulary at meetings of the Council of Australian Governments. Nor has he been impressed by the way the states have continued to blame the Federal Government for funding problems faced by state-run services, such as hospitals, schools and transport.
The Prime Minister is quick to point out that the states will be almost $9 billion better off by 2007-08 courtesy of the GST. And yet, the states still come back for more. Is the situation likely to improve as a result of Saturday's election? I don't think so. Only yesterday, we learned that the Premier of Victoria is in the process of writing to the state premiers and chief ministers proposing a new council of state and territory governments to determine pre-agreed positions on issues to come before COAG.
So, what does all this mean for local government?
The Prime Minister is looking for new ways to get on with the business of delivering services to the Australian people. If he has problems with the states, he will increasingly look for alternative pathways - and that's where local government comes in. We have already seen this approach with the landmark Roads to Recovery program. The Prime Minsiter has said - time and time again - that one of the great features of the program is that funding goes direct to councils. It by-passes the states.
Now, from a local government perspective, we're keen to see the three spheres of government - federal, state-and-territory, and local - working together as equal partners, delivering better services and improving outcomes for the communities we collectively serve. We acknowledge the important role the states and territories play within our federation. We want to work closely with them - especially through the Council of Australian Governments - to address the important issues facing us all, whether it's water, salinity, Indigenous issues, bushfires, security or ageing and demographic change. But if the federal government is keen to build a stronger partnership with local government, to advance mutually agreed priorities and build stronger, more resiliant communities, then we're not going to be wall-flowers. We're putting our hands straight up!
There's one further general point I'd like to make. Local government's relationship with both the Government and the Opposition remains very healthy. During the last week of a tight and frantic campaign, Martin Ferguson took the time to ring ALGA to thank us for a media release we issued welcoming Labor's transport policy. It was a much appreciated gesture.
I have also had calls from Coalition Ministers, again thanking ALGA for fair and positive comment on the release of key policies. In short, our stocks are good with the major parties. We can look forward to a good working relationship with both the Coalition Government and with the Labor Opposition in the months and years ahead. I'd like to turn now to the specific policies released by the Coalition.
First to the local government policy released last Tuesday. This document commits a fourth term Howard Government to:
- Reform goverance and financing arrangements for local government;
- Convene a COAG summit to develop a memorandum of understanding on cost shifting;
- Support the R2R model of direct funding for local government, opening the possibility of similar R2R funding arrangments in the future for other areas of service or infrastructure delivery;
- Implement planning reform along the lines being developed by the Development Assessment Forum - but only - and this is a significant win - with the full support of councils; and
- Work with local government to implement the key recommendations of the Fair Share report on cost shifting and local government financing.
In essence, we have a commitment to press ahead with a large and complex reform agenda to address cost shifting. We have a commitment to get this issue on the COAG agenda. And we have a dialogue on broader local government financing issues. Much of this policy is also reflected in the directional statement issued by Labor early in the campaign. We have - to a large degree - bipartisan support for the reform agenda. We now need to drive this forward.
I think it fair to say that we have already had some positive post-election signals that this issue is one that won't fall off the bandwagon. We have also achieved considerable progress on transport policy. Early in the campaign, the Coalition announced a major change to the way it intended to implement Roads to Recovery Mark II. Under the AusLink white paper, Roads to Recovery was to be funded at $1.2 billion over four years, but one third of the allocation to individual councils was to be siphoned off and allocated to a funding pool to be used for local road projects of regional significance. The policy announcement did away with the requirement for a one-third contribution to the regional pool and restored the full allocation to each council.
The regional pool will now be funded by a new allocation of $150m, above and beyond the $1.2 billion to be shared among individual councils. This is a major concession that will see Roads to Recovery Mark II as a virtual carbon copy of the current program. The additional $150m for the regional pool is a great outcome. Some of this pool has, in fact, already been allocated to a number of specific projects, including $20m for the Outback Highway.
We are also delighted that the Coaltion will renew the Black Spot road safety program for a further two years at a cost of $90m. The campaign to renew the Roads to Recovery program was an important national initiative that delivered the goods. And here I'd like to formally acknolwedge the work of the LGANT and your individual members. Your work was invaluable in achieving our objectives and I thank you for it. Altogether, Roads to Recovery will inject more than $2.5 billion into local government for local roads over the life of the two programs. A great and much needed result.
Apart from the local government financing and transport, there have been a number of other policy commitments over the past few weeks that will directly benefit local government. The Coalition announced a $33m commitment to enhance local government's emergency management capacity. This will provide:
- $30m in grants to boost emergency preparedness and capacity at the local level
- $1m to be used by Emergency Management Australia and ALGA to develop a national strategic plan for local consequence management in partnership with councils
- $2m over four years for a dedicated office of local government emergency management within EMA
The Coalition has also pledged $15m to support rural councils that have to dip into their own scarce funds to buy surgeries and accommodation in a bid to retain or recruit doctors in their communities. This came in direct response to a bid prepared by ALGA, the Rural Doctors Association, the National Farmers Federation, the CWA and rural and remote health consumers.
Local government will also be able to access a $1.6 billion water fund for innovative projects to improve water conservation. The policy will allow councils, state governments and industry groups to bid for funding to support projects that upgrade waterways and find new methods of recycling and re-using water.
A further $200m will also be provided for a Water wise communities initiative to reward efficient water use.
They say that every rose has a thorn. In this case, the policy will be funded by diverting payments provided to state governments for implementing national competition policy. While most state governments have not passed a share of competition payments on to local government, some do.
This is an issue that will require some further work, though it must be noted that Labor also proposed to use NCP payments to fund their own election commitments.
The Coalition has been keen for some time to reduce the red tape facing home-based business. Local government has - unfairly in my view - been in the gun sights of the home-based business sector for some time. But we're pleased that the Federal Government has decided to use a carrot rather than a stick. The Coalition will offer a $50m grants program to encourage councils to offer more flexible regulatory regimes to ease the red tape on people who want to hang up a shingle at home.
Councils are becoming increasingly engaged in community safety and this has been recognised with an additional $30m for national community crime prevention programs, including an additional $10m for a grant program that can be accessed by local government and community groups. Overall, local government has secured some important commitments for local government.
Importantly, we have secured commitments from both sides to progress the key recommendations of the Fair Share report. We have secured commitments to progress reform of the federal/local government financial relationship. We have secured commitments to address cost shifting through the development of an intergovernmental agreement and a memorandum of understanding. And we have secured commitments to strengthen local government's voice at a national level.
One thing we won't see immediately - however - is this. We won't see either side whipping out the cheque book and offering a massive boost to financial assistance grants overnight. A commitment to move federal funding for local government onto a growth curve is going to take some time yet. But I am convinced that we do have a rare opportunity to drive the agenda for change.
The case for change has been made in spades by local government and ALGA. It's also well reflected in the findings of the Fair Share report. We have made a solid start. Now that the election has come and gone, we will need to mobilise local government to ratchet up the pressure for change.
We need a Roads-to-Recovery-style campaign to drive home the case for a fair funding deal from the federal government. This would ensure the momentum for change is carried forward. We will - again - need to turn the backbenchers into our strongest allies. By working with them - not against them - we can secure change that will place local government on a more stable and secure financial footing.
Local government has done well over the past few months. There is now bipartisan support for enduring change. It is now up to us to seize the moment and make this change a reality. Again, it is terrific to be here today. I hope to see you all next month at the National General Assembly of Local Government in Canberra.
Thank you.
Councillor Mike Montgomery
President, Australian Local Government Association
13 October 2004
Darwin
