Speeches: 2004
The state of play in Commonwealth/local government relations
I've been asked to address the state of play in Commonwealth - local government relations. In doing so, I'll give you an overview of ALGA's national priorities and then take a look at prospects for advancing these agendas under either a fourth term Howard/Costello Government or a freshly-elected Latham Labor administration.
Address to South Australian Local Government Association Residential Seminar
Councillor Mike Montgomery
President, Australian Local Government Association
2 July 2004: Barossa Valley, South Australia
Thank you Chairman.
I've been asked to address the state of play in Commonwealth - local government relations.
In doing so, I'll give you an overview of ALGA's national priorities and then take a look at prospects for advancing these agendas under either a fourth term Howard/Costello Government or a freshly-elected Latham Labor administration.
ALGA's Core Issues
First to core issues.
At the General Assembly of Local Government last year I set out two core goals for ALGA - re-newing the Roads to Recovery program and advancing the case for a fair share of national taxation revenue.
I'm delighted to say that we have already secured the renewal of the Roads to Recovery program, although we still have some problems with the Commonwealth's approach to the allocation of funds for the strategic component of the program - problems that will be addressed when we meet here for the National Local Roads Congress in less than two weeks time.
But the important point is that we have gained an additional $1.2 billion for local roads - and that's a fine achievement.
I'd like to personally thank all South Australian councils and councillors who put their shoulder to the wheel and helped lobby for a successful outcome.
Local Government Financing
Our second major objective concerns local government financing.
ALGA has argued long and loud that local government is getting a raw deal through the current system of financial assistance grants. In 2001, we secured a review of cost shifting and local government financing which resulted in the Hawker inquiry.
Hawker's report - Rates and Taxes: A Fair Share for Responsible Local Government - produced some very significant recommendations that hold open the door to a better deal for local government, particularly by addressing cost shifting, overhauling Commonwealth - local government relationships and developing a high level intergovernmental agreement on the roles and responsibilities of each sphere of government.
We have three goals arising from the Fair Share report.
First, we need intergovernmental agreements to stop the transfer of unfunded mandates, to determine the roles and responsibilities of local government and to ensure funding and resources are available to match.
Second, we want to press the case for a Council of Australian Governments summit to be convened on intergovernmental relations.
If cost shifting is to be effectively dealt with and local government's role and funding arrangements secured, the task will need to be handled at the highest level.
Third, we want the Federal Government to overhaul - and ideally scrap - the archaic system of financial assistance grants - and instead provide local government with a fair share of national taxation revenue.
Other ALGA Objectives
In addition to these two core goals, ALGA is also working to achieve a number of other objects, including:
- securing constitutional recognition for local government
- building stronger Commonwealth - local government partnerships
- replacing and renewing our ageing infrastructure
- boosting regional development and regional aviation
- improving access to health care for regional communities
- developing sustainable urban transport
- supporting local government's growing role in human services
- promoting sustainable cities and towns; and
- enhancing our capacity to meet the demands of an ageing population.
ALGA will shortly be releasing a policy document in advance of the coming federal election - A Blueprint for Building Better Communities - which will outline our priorities for the years ahead.
This will provide something of a benchmark against which we can assess the policies of the major parties as they are released.
These policies will reflect the importance the respective parties place on their relationship with local government.
So, what can we expect?
I think it fair to say that - no matter who wins - local government is in a sound position to advance our cause on a number of fronts.
Latham and the Labor Party
Let's look at Labor first.
If the public entrust him with the keys to the Lodge, he will become the fifth Australian Prime Minister with a local government background, joining John Gorton, Earle Page, Ben Chifley and Arthur Fadden.
Mark Latham spent seven years on the Liverpool Council, three of them as mayor. His local government experience means two things for us. Firstly, Latham understands local government. He understands our strengths and weaknesses. He also knows where the bodies are buried.
Secondly - and most importantly - he has a passion for politics - grass roots style.
Latham said in Parliament last year that people no longer have close, trusting relationships with each other. This loss of trust is now so prevalent that many don't even know the names of their next-door neighbours.
Latham spoke of the need to re-engage people in their communities and find new ways of doing this. "These are," he said, "pressing concerns".
I tell you this to illustrate Latham's focus on issues with which people can readily identify.
It's the parish pump approach to politics - he seizes on those everyday community issues with which we all identify - obese children, safety on our streets, the condition of our roads.
This all points to a focus on local level activity.
Another indication of Labor intentions can be gained from the recently revised party platform. It commits Labor to a range of important initiatives including:
- supporting a referendum to amend the Australian Constitution to recognise the autonomous role of local government.
- recognising the importance of effective partnerships between local government and the Commonwealth in the efficient delivery of services that impact directly on the living standards of Australians.
- improving and protecting the provision of infrastructure and services to local communities and to achieve best practice in the development, management and maintenance of infrastructure.
- working with local government on the formulation and implementation of regional development strategies.
- recognising that state and Federal governments have shifted costs to local government without adequately resourcing councils and examining ways to redress the funding shortfall suffered by local government.
Labor's platform also commits it to provide for "serious discussion" on the future funding arrangements for local government, involving Federal Government, state and local government, and that industry unions be asked to contribute to this important discussion.
Now "serious discussion" doesn't commit them to spend an extra cent on local government - but the platform can't commit a future government to spend money and at least it's a step in the right direction.
On the matter of money, we need to understand that - right now - Labor is tearing its heart out trying to find ways to fund their yet to be announced election commitments. Like the Coalition, they bow before the great god of Budget surpluses. They are now desperately seeking to find ways to cut money from programs and initiatives that will not cause electoral distress.
At the same time, Howard and Costello are rapidly running down the size of the surplus in the forward estimates, making Latham's tasks harder by the day.
The desperate search for extra dollars - however - is not good news for local government. It means there will be precious few dollars around for new initiatives the other side of the poll.
While we are yet to see Labor's local government policy, the party already has in place a number of commitments that affect councils.
Labor's current commitments
A the General Assembly last year, Labor announced it will move towards the allocation of funding to local government on a needs basis according to a national formula to be developed by the Commonwealth Grants Commission in consultation with local government, local government grants commissions and the states and territories.
Labor has also committed itself to maintain the real terms per capita guarantee for local government funding.
On infrastructure, Labor has recognised the problems facing local government and is committed to a national infrastructure advisory council, which will involve local government as well as the state, territories and the Commonwealth.
Mark Latham has also committed Labor to action on sustainable cities, and will place the needs of edge cities on the agenda of the Council of Australian Governments.
While some detail is now out in the public domain, most of Labor's policy agenda is yet to be released. We are yet - as they say - to see the colour of their money.
The Coalition's approach to local government
So, what will happen if John Howard is returned for a fourth term? Again, local government is well placed to move ahead some of our core agendas.
We know that the Federal Minister for Local Government, Ian Campbell, is personally overseeing the development of Coalition policy.
We can also take a guess that we are not likely to see a formal government response to the Fair Share report until after the coming election.
This means that the Coalition's policy on local government will be of major importance.
When released, we could reasonably expect it to set out how the Government will respond to the Fair Share report, should it be returned to office.
What can we expect? Well, we already have some clues.
Firstly, there will be no extra dollars on the table. Campbell has made that clear from the start. However, during a recent Senate Estimates Committee hearing, after a bit of off-mark needling by a Labor senator, he said the reform process upon which he was embarking would be the most significant since Federation.
He said- and I quote -
"This government has set about one of the biggest reforms to the relationship between local government and the other two spheres of government - state and federal - that has occurred since Federation."
"We are keen" - he said - "to create, as far as we possibly can, a more constructive relationship, to make sure local governments can serve their communities effectively and to give them more security in terms of the financial support."
I'll just repeat that - "more security in terms of financial support".
Significantly, the Minister has pointed to the Roads to Recovery program as a possible model for delivering services to communities through and with local government.
He has mentioned that - for example, the Government is looking at the Home and Community Care Program to see if it could be paid directly to councils for service provision.
There are two important points here.
Firstly, we should never under estimate the importance the Australian Government places on the visibility of how and where Commonwealth dollars are spent.
Roads to Recovery signs show Commonwealth dollars at work. Roads to Recovery events involving the local Federal Member show Commonwealth dollars at work. Roads to Recovery media releases show Commonwealth dollars at work.
As a result, the public knows where Commonwealth Roads to Recovery dollars are being spent. They have little idea where Commonwealth health or education dollars are being invested.
In other words, the Government is getting plenty of political mileage for its R2R dollar.
Secondly, it demonstrates the Coalition Government's increasing frustration with the states. Just before last Friday's meeting of COAG, the Prime Minister issued a released pointing out that the updated revenue estimates show that the states and territories will be almost $9 billion better off by 2007-08 as a result of the GST.
The states and territories - Howard said - had for many years sought access to a source of growth revenue so they would undertake long term planning needed to meet the demands of a growing population.
Now they have it, meaning they now have - Howard said - more than enough to fund hospitals, schools, roads and other community services to the highest standard.
Howard is clearly very annoyed - to put it mildly - that they keep coming back for more. More money for education, more money for hospitals, roads, water, the environment … the list goes on and on.
The Prime Minister is now actively looking for other ways to promote the needs of the nation - and local government is emphatically on his radar screen.
Should the Coalition be returned, it is my guess that we will be in a strong position to lever additional dollars from the Commonwealth to achieve jointly agreed objectives.
Conclusion
In summary, I think both major parties are beginning to see local government as an increasingly important player in the Australian federation.
Under Labor, local government will clearly benefit from a strong and pro-council party platform and a strong and pro-council Prime Minister.
We will also benefit, I feel, from the existence of an increasingly large number of Federal Labor politicians who have come up through the ranks of local government.
Under a Coalition Government, we will benefit from a clear commitment for positive change in the federal/local government relationship, as expressed recently by Ian Campbell.
We also stand to benefit from the increasing tension between the state and federal governments and the Prime Minister's increasing desire to find a third way to deliver outcomes for the Australian people.
We will, however, find that neither party will want to hand us money on a plate just because we are in desperate need and have a sound case.
We will need to offer win-win solutions where the Australian Government can address their priorities and get a clear return for the money spent.
Nonetheless, no matter what happens at the ballot box, we are in for a period of change.
But - at the end of the day - it will be up to us to see just how far we can drive that change and just how far it goes to addressing the growing needs and concerns of our communities.
Thank you.
Councillor Mike Montgomery President
Australian Local Government Association
Barossa Valley, South Australia
2 July 2004
