Speeches: 2005
The future of local government
" … Councils are increasingly engaged in planning with the longer-term future in mind. We are anticipating change - change in the way people live and work, change in the way we travel, change in our demographic profile, change in our cultural profile. We also want to influence the way things change and are increasingly examining the drivers of change. … "
Address to MAV's The future of local government summit 2005
Cr Paul Bell AM
President, Australian Local Goverment Association
7 June 2005, Melbourne
Cr Geoff Lake and members of the MAV executive, distinguished guests, fellow delegates
In developing and promoting this conference, the Municipal Association of Victoria argued that local government doesn't spend enough time contemplating its future. I think this is true. But like most generalisations, it is only partly true. As councillors and CEOs, we are - by our very nature - practical people whose lives are dedicated to tackling the day-to-day problems confronting us and our constituents.
Councils are increasingly engaged in planning with the longer-term future in mind. We are anticipating change - change in the way people live and work, change in the way we travel, change in our demographic profile, change in our cultural profile. We also want to influence the way things change and are increasingly examining the drivers of change. And we are increasingly looking at what kind of future we want for our communities - not just around the corner - but in 30, 40 and 50 years time. Against this background, we are also looking to the future of local government itself.
The problems are largely these:
Despite significant advances over the past decade, local government remains - at best - a junior partner within the Australian Federation. We continue to live within a straight jacket when it comes to the ability to raise our own revenue.
The practice of cost-shifting - perhaps better described as responsibility-shifting - has continued to weigh us down, forcing us to spread our scarce resources ever more thinly.
Community demand is pressuring us to provide more and more services, often picking up those that have been abandoned or poorly performed by other spheres of government.
And funding from federal and state governments - those spheres of government charged with properly redistributing the taxes they collect - continues to see us short-changed.
Local government has a vision for the future and it's based on four clear priorities.
A Fair Share
Local government in Australia seeks a fair distribution of the nation's tax wealth to counter the problems of vertical fiscal imbalance - and that means - at the federal level - access to a fair share of national taxation revenue.
Constitutional recognition
We seek recognition in the Australian Constitution to afford us at least some level of protection from arbitrary interference. This would - we believe - also help us to become an equal and valued partner within the Australian federation.
End to cost shifting
We seek an end to cost shifting and the development of proper agreements to ensure fair deals are the order of the day - agreed additional responsibilities must come with agreed additional resources.
Federal partnerships
We also seek to grow our relationship with the federal government so that we can work together on agreed national priorities. The Roads to Recovery model - a model that will see the Australian Government invest another $1.2bn in local roads over the next four years - is now seen as a model for the future. We would like to see new partnerships forged in areas such as natural resource management, public health, infrastructure and information and communication technology.
These, of course, are medium term goals. Looking further into the future, I believe - and it's a personal view - that local government - if we are to reach our full potential - needs to grow - and I don't mean geographically. We need to grow in terms of roles and responsibilities. While our roles and responsibilities have been growing over the past decade or so, we don't have the scope of local government elsewhere.
In many other OECD countries, such as the UK, the USA and Canada, local government has responsibility for services such as health, education, policing and public housing. As a consequence, we are - to some extent - still a minnow swimming with sharks. As sphere of government, we need to consider some fundamental questions about the role of government in the 21st century. Local government's current role has four key parts:
- planning
- coordination
- service delivery
- regulation
The challenge for local government leaders is to determine the appropriate mix of these functions and then consider what additional roles we may wish to play to truly meet community expectation.
The issue of roles and responsibilities of the three spheres of government is one that should be centre stage. It should be - but it isn't.
What is on centre stage - however - is Hawker.
Fair Share report
As we speak, the Australian Government is considering its response to David Hawker's Fair Share report - a report that examined the pressures facing local government and made some very significant recommendations for reform. Hawker was far from perfect. But it did pick up on our core issues and - to its credit - acknowledged the financial pressures we face. he overwhelming issue - the report found - was - and I quote - "the underlying issues relating to governance arrangements between the three spheres of government".
It recommended an intergovernmental agreement to look at roles and responsibilities of each sphere of government and their financial relationships. It also focused on the need for funding to follow function. Specifically, it recommended - among other things - that:
- the federal government continue to develop partnerships with local government
- COAG host a summit on intergovernmental relations
- an intergovernmental agreement between all three spheres of government be developed to deal with cost shifting and address state restrictions on local government revenue raising such as rate pegging.
Fair Share was prevented - by way of its terms of reference - from making recommendations that were anything but revenue neutral for the Commonwealth.
Despite this, ALGA has continued to press the Australian Government to address the issue of quantum. In particular, we have asked that the system of financial assistance grants be replaced with a 1% share of national taxation revenue. In other words - we want access to fair funding that grows as the economy grows.
So, what happens from here? The Federal Local Government Minister, Jim Lloyd, will take a package of broad proposals to Cabinet. Once he gets the green light, he will work up a detailed response to the Fair Share report and table it in Federal Parliament. This will occur - we believe - sometime before the next meeting of local government and planning ministers, to be held in Melbourne in early August. I've meet Jim Lloyd twice in the past three weeks and anticipate further meetings as he fine-tunes his response. We will also meet with the Prime Minister to press our case for meaningful change.
What can we expect? I believe that there will be no 'big bang' - no sudden and dramatic change. Instead, I expect incremental - but significant - change that will see the development of stronger ties between local and federal government. The big danger for local government is that - as we secure greater access to federal funds - we might see state governments reduce their efforts. This has happened in the case of one state with the advent of Roads to Recovery. We therefore need to plug the gaps by securing an intergovernmental agreement that will see our revenues grow without anyone taking advantage of the situation.
The next 12 months will be important ones for local government that will - I hope - see a brighter future for all councils and the communities we serve. here are a number of things going for us. Local government is increasingly sophisticated. It is increasingly responsible and responsive. And while national and state bureaucracies hate variation, it is clear that diversity is our strength. One size does not fit all - and it is increasingly recognised we can deliver for communities when our state and federal counterparts cannot.
Conclusion
As I said earlier, this is an important conference. It comes at an important time. I commend MAV for undertaking the exercise and I'll leave you with two quotes.
Albert Einstein said: "I never think about the future - it comes soon enough".
And it was Paul Valery who said "the trouble with our times is that the future just isn't what it used to be".
But I'm with Alan Kay who said the "best way to predict the future is to invent it".
I wish you all well and encourage your invention over the next two days.
Thank you.
Cr Paul Bell AM
Australian Local Government Association
7 June 2005
Melbourne
