A parliamentary committee will investigate the role of the federal government in addressing the sustainability of local government.
The House of Representatives Standing Committee on Regional Development Infrastructure and Transport announced on Thursday that the new inquiry will consider a range of issues including:
- financial sustainability and funding
- changing infrastructure and service delivery obligations
- workforce attraction and retention and labour hire practices
Committee Chair Luke Gosling said local government sustainability is essential to supporting the community by providing local infrastructure and related services.
The committee will consider submissions on the challenges faced by the sector in doing this, Mr Gosling said.
“The Committee has prioritised a deeper understanding of local government financial sustainability and funding frameworks, alongside the changing infrastructure requirements and service delivery obligations for local governments,” he said.
Mr Gosling said the Committee is also aware of significant public infrastructure workforce shortages, particularly in local government areas, and the importance of promoting skills development and job security.
“The Committee will examine labour hire and retention trends, including the impacts of labour hire practices, to identify barriers and opportunities to support our local workforce and local government sustainability and service delivery obligations,” he said.
The announcement has been welcomed by the Australian Services Union, which says ongoing funding shortfalls across local government workforces have resulted in outsourcing, reduced services, and an overall erosion in the quality of local jobs and services.
Announcement welcomed
ALGA said with additional responsibilities costing billions of dollars being forced onto Australia’s 537 councils every year, it expects the inquiry will consider and address the financial challenges and funding shortfalls being faced by local governments.
President Linda Scott said the association looked forward to presenting the sector’s case to the committee.
“It’s encouraging that the changing infrastructure and service delivery obligations of local government have been recognised and included in the inquiry’s terms of reference.
ASU National Secretary Robert Potter said the announcement was a welcome acknowledgement that local government mattered.
“Our communities are relying on these local government workforces more than ever yet these services, and the workers that run them, have faced extreme financial pressures and reduced funding, threatening the sustainability of the sector and the critical services they provide,” he said.
However he said more work remains to be done and the ASU is calling for further commitments including increased funding for Federal Assistance Grants.
The committee is accepting submissions until May 3.
Earlier this year, the independent NSW Price Regulator announced it was reviewing the financial model for councils, including whether the current funding system delivers value for money and can sustainably support community needs.
Submissions for the IPART review are now closed, with a report due to government in 12 months.
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Other than management incompetence and internecine warfare between councillors and between councillors and mayors which prevents their scrutinising management policies, and incompetent/corrupt managements, the biggest threats to financial sustainability of local government council areas are:
1 Both federal and state governments have legislated that large areas within council areas are exempted from paying rates. If those areas are owned by all the public and accessible by all of the public, then such an exemption may be justified. Large areas of land (and buildings)given to state and federal Land Councils are rates exempt yet ratepayers are expected to fund maintenance and upgrades of roads and services to those. Large areas of land are also owned by excluding religious schools – with the definition of “use” being very open-ended – and are also rates exempt. Land on which religion- isms are preached, and that which supplies the preachers/priests with accommodation, are also rates exempt.
Public housing tenants also do not pay rates and, as far as I can ascertain, the state/federal governments do not pay compensatory council rates on those properties.
In short, 1/3 – even more – of land in regional areas has been rates exempted by state and federal governments yet those governments do not compensate local government for those exemptions.
In addition:
2Then there are rates concessions for people receiving pensions- 40% in some/most? cases for which councils are not compensated by the Feds.
3 The persistent off-loading of state (predominantly) responsibilities onto local council ratepayers has meant that ratepayers – and only ratepayers – have to pay significantly higher rates. In NSW the most egregious of these has been the State Emergency Services Levy (SES) – with rating categorisation of land determining the amount to be paid. This meant that ratepayers who had taken out house insurance were paying that levy twice. The NSW government claimed that it would remove that levy (taxed thrice on each policy) from house insurance policies but did not. In addition, in NSW, ratepayers who pay for private health insurance have the cost of ambulance transport included in their policies, the issuers of which do pay a levy to the state government.
Non-ratepayers made no direct or indirect contribution that that SES levy.
The above may not directly impact council finances other than in the cost of the associated bureaucracy. However presumably it would, indirectly, because it would limit the amount by which they could increase other rates costs without risking a ratepayers’ rebellion.
3 Cost of road maintenance. In rural areas there are non-highway standard roads that fulfil the role of highways i.e., they link inland regions with coastal or metropolitan regions via a number of council areas. Effectively, these act as down-market highways yet state (in NSW) governments do not fund them as such. Each council area is expected to fund its maintenance and upgrades of its “bit” and that ensures not only that road quality is “inconsistent” between council areas but also that councils cannot fund maintenance, repairs and upgrades to their other internal roads without further increasing their rates and risking ratepayer backlash.
Reality: state and federal political pork barrelling in order to win elections will continue to ensure that they will continue to offload the cost of their responsibilities onto local government – and that means onto ratepayers only.
Ongoing Issue. Without a independent stream other than Rates and parking charges . The only revenue base for many local councils isl effectively trade Planning offsets for cash. Call VPA’s in NSW
Using CASH from developers large and small as a funding source. Barter with , seek funded by trading Development privileges PLANNING rights for infrastructure funds.
Their is No hint of corruption as States also do this called political donations, Usually it happens behind closed doors and they use whiteboards.
So, with the piecemeal funding from States. occasional grants from Federal and state governments, that are never enough funds . So, Infrastructure and servicing backlogs just become a increased burden on all of society.
But that is What we have in our two tiered Government system where neither tiers actually touch the ground in terms of everyday infrastructure renewal or services provision at a local level.
Whats needed is acknowledgment that Local Government is Arm of real tier of Government, in form of a Income stream at the Federal level of Infrastructure funding.
Yes, A national Levy but not GST add on.
Say. similar to what Banks charge customers on every transaction. their universal tax that not a tax but a charge. Only federal Govt has taxation powers ………..except for Banks.