Speeches: 2005
ALGA's national priorities
… 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 significant recommendations for reform. Hawker wasn't perfect. But it did pick up on our core issues and - to its credit - acknowledged the financial pressures we face. Importantly, the report hit the nail on the head when it identified the core problem as - and I quote: "the underlying issues relating to governance arrangements between the three spheres of government." …
Address to the Shires Association of NSW annual conference
Cr Paul Bell AM
President, Australian Local Goverment Association
8 June 2005, Sydney
Shires Association President and fellow ALGA Board Member, Cr Phyllis Miller, members of the Shires Association Executive, distinguished guests, delegates
Today I'd like to do two things.
- outline ALGA's national priorities; and
- give you an update on the Fair Share report and cost shifting.
First to the national priorities. In this game, it's too easy to become distracted and chase rabbits down burrows. It's important that we keep our eyes on the prize and focus on clear national goals. The national goals the ALGA Board has set fall neatly into four headings.
1. Fair Share
Local government in Australia seeks a fair distribution of the nation's tax wealth to counter the problems of vertical fiscal imbalance. That means access to a fair share of national taxation revenue. We seek to replace the archaic system of financial assistance grants with a 1% share of national tax revenue. That would give local government an immediate $400m increase in funding and would give us access to a revenue source that grows as the economy grows.
2. 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.
3. 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 more than $1.3bn 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.
4. Constitutional recognition
We also seek recognition in the Australian Constitution to afford us at least some level of protection from arbitrary interference. This would also help us to become an equal and valued partner within the Australian federation.
So, how are we travelling?
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 significant recommendations for reform. Hawker wasn't perfect. But it did pick up on our core issues and - to its credit - acknowledged the financial pressures we face. Importantly, the report hit the nail on the head when it identified the core problem as - and I quote: "the underlying issues relating to governance arrangements between the three spheres of government".
In short - the federation's not working as well as it should and it's local government that's had the rough end of the pineapple. 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 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. So, what happens from here? The Federal minister responsible for local government, 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.
- We want an intergovernmental agreement on cost shifting that's got teeth.
- We want a way forward on quantum.
- We want to see a closer working relationship and new partnerships with the Australian Government.
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 must plug the gaps by securing an intergovernmental agreement that will see our revenues grow without anyone taking advantage of the situation.
Preliminary work has already begun on the agreement. For its part, the ALGA Board has opted for an 'allocative' model. Put simply, that means an IGA that will have two key functions. It will have a set of principles guiding how roles and responsibilities should be divided between the spheres of government. And it will have an effective mechanism to discourage cost shifting. We need all three spheres of government to come together to work cooperatively if we are to achieve a meaningful IGA. The last thing we need is a puffed up piece of paper that is full of fine words, but has little impact at the coal face.
Local government and planning ministers will consider the development of the IGA when they next meet in Melbourne. Before then, a working group of state local government associations and ALGA representatives will work on the details of our allocative model. We will need to work on state and federal governments to gain their support for the model and then work with them to see it set in stone. This process will take some time and we will endeavour to keep you informed of progress. At the same time, we will continue to press our case for a fair share of taxation revenue.
I don't expect the Australian Government to make any immediate change. The PM won't be opening his cheque book tomorrow and saying, 'How much do you want?' But I hope they do put in place a process that will pave the way forward. This is the big test - it's the big hurdle - it's the river we need to cross. I might say that the Australian Government has done good things for councils. In the recent Budget, they made good on all of the key election commitments made to us last year. Roads to Recovery will be delivered in full - another $1.35 billion for local roads over the next four years. The Black Spot program has been extended - another $90m.
We have secured access to the $2 billion Australian Water Fund - in fact the first three grants have been made to local government water utilities - and I'm sure there will be many more to follow. $15m has been provided to help rural councils that have to step in and buy or build medical facilities to attract or retain doctors in their communities. And there's $33m for an emergency management grant scheme, additional funding for regional programs and a boost to community crime prevention grants as well.
In summary: We must build on this momentum and press ahead. We must all be strong advocates for change at the national level. And - as Benjamin Franklin said - we must all hang together - or most certainly - we will all hang separately.
Thank you.
Cr Paul Bell AM
Australian Local Government Association
8 June 2005
Sydney
