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Tuesday, 25 November 2003
Page: 22814


Mr SIDEBOTTOM (4:54 PM) —Like other members, I am very pleased to be able to speak on the tabling of the report of the House of Representatives Standing Committee on Economics, Finance and Public Administration entitled Rates and taxes: a fair share for responsible local government. I am very pleased to do that from a number of angles. First and foremost, I used to be in local government, albeit for a brief period, but I certainly appreciated the additional burdens, costs and expectations that were levelled at local government. The second interesting point that came to mind from a quick cursory glance at the report is that I thought it was going to be a state-bashing exercise in order to point the finger at the states and carry on the ideological battle that is taking place at the moment between the federal government and the states. I was very pleasantly pleased—I will not say surprised, looking at the calibre of the people on that committee—that the states came in for a little critical observation, and rightly so, as does the Commonwealth. In essence, it was a unanimous bipartisan report.

The third very important point about this report is that it highlights one of the most underrated but overused institutions and important agencies in our democracy and our communities: local government. It was interesting to note that there are about 721 of these local government organisations throughout our states and territories. It is a very important level of government and governance. It is as close as any level of government to the people. This report drives one little wedge into an argument about the future nature of our democracy and Constitution in Australia: the importance of regional governance and government in Australia and the question of whether we should change our Constitution and have a central government dealing with regional governments and phase out state government roles. That is an interesting and controversial point of view which has not been raised directly in this booklet. If some of the recommendations are genuinely sought and put into practical effect based on the recommendations in Rates and taxes: a fair share for responsible local government, I think it will advance that argument a little more as our democracy continues to mature and evolve. But I am talking about constitutional change, and we all know what that means. The mechanism required to bring that about would make this too hypothetical at the moment.

When I heard that this investigation was taking place, I was very interested in joining the committee. When you look at the role and practices of local government and the issue of cost shifting in particular, you can see it happening at all levels—directly, indirectly and by, some would say, insidious means and by stealth. I have looked at some of the ways cost shifting has occurred in local government. For instance, there is cost shifting through legislative reform. This is happening not just at the state level—if you want to have a go at the states—but also at the Commonwealth level, particularly with the introduction of legislative issues such as the FBT and the GST. Taxes upon taxes are mentioned in the report and they are particularly related to the GST. Also, legislative changes by state governments to the vehicle and traffic act—I am thinking about my own state—have made local government responsible for roadside vending on state roads. Apart from a state going for a bucket of money, there is nothing as quick as a state trying to offload a road onto local government and this has been very successful in my state. I will give a little history. A little stretch of road coming from Braddon's Lookout, which is just above my beautiful village at Forth on the northwest coast, to the pub at Forth—it does not go very far; it is about 500 metres—still belongs to the state and do you think the local government will take that on? Not on your Nelly. The reason is that there is not a fair shift of responsibility because the ongoing maintenance and costs are not covered. That basically sums up what has been going on between the states and local government. The Forth road from the Forth pub up to Braddon's Lookout is exactly what has been going on between states and local government.

There is cost shifting through the creation of new mandates. Let us face it, governments mandate lots of things, particularly in relation to the environment, housing, roads and transport, town limits, no-go areas, traffic and pedestrian lights, TV black spots—a great program from the Commonwealth, and I am the first to support and promote it. Even that in itself says, `We will assist you to put up your translators, your transponders or whatever else you want to call them but, unfortunately, local government, you're the auspicing body because most local governments are the only ones who can do this.' They have the ongoing costs and, if you are looking at, say, the outlay of $150,000 for a translator, set aside $40,000 a year for maintenance. That is a mandated example of cost shifting—albeit for the most positive of reasons—but local government is expected to take that up. That is one of these cost-shifting mechanisms for taking on these extra tasks that come from the expectation of the community.

There is cost shifting through national and international agreements. We know many of the national environmental protection measures and environment protection policies have a tremendous impact on local government. These are part and parcel of our international agreements. But who wears it in the end? Local government wears it in the end. Again, there is cost shifting through short-term funding of projects and programs as there is an expectation by the community that certain programs are presented by local government. In the end, that cost is shifted over to local government, such as natural resource management, Coastwatch, Waterwatch, river works and weed management, recreation, the arts and culture, youth and community service programs. My favourite, the excellent Commonwealth TV black spots program, is another example. That is okay, but the ongoing funding does not exist.

There is cost shifting through the cessation of state and Commonwealth government activities. Examples at the local level include: inspection of certification of persons and businesses such as milk vendors; the increased role in the inspection of licensed premises—you do not need to watch Faulty Towers to see the increased load on local government, particularly in health inspections and standards—an increased demand on immunisation services provided by the state government but administered by the local government; pressure to install surveillance cameras as police presence is wound back; state road maintenance such as landslips; technical advice to the community such as agricultural land capacity and land stability; health care; community programs; transport; housing; and new services.

Local governments, as I mentioned earlier—take the TV black spots program—carry out auspicing roles and responsibilities. In the end, they take on the responsibility of maintaining these. We all know about national competition policy and the demands on states. Indeed, the states then pass these on to local government in a variety of areas. The state governments get the benefit of the national competition payments, but you will hear local governments continually asking the state governments to disburse those national competition policy moneys. Many would argue that that in fact does not occur or, if it does, it does not occur at a proportionate level of the expenditure of local government.

There is the shifting of non-performing assets to local government. We have examples of that on King Island where the Commonwealth was responsible for a lighthouse but when they tried to find the deeds to the ownership of the lighthouse and maintenance of it, the Commonwealth had not carried out maintenance for years. The Commonwealth threatened to abandon the lighthouse unless the local government effectively took up some moneys to maintain it and paint it. They only got enough to half paint it, and everybody knows the weathering pressures on a lighthouse. That is an example of the offloading of these assets and the state governments are part and parcel of this too. I have mentioned cost shifting through the cessation of state and Commonwealth government activities and on it goes.

There are environmental management obligations on local government and proportional funding is not ongoing for those. When all these pressures for cost shifting are added together, you find local government groaning under the burden of expectations of both state and Commonwealth governments—and of course local expectations. One of the great things about living in Australia is that we are able to travel, and when we go to other parts of Australia—admittedly most mainlanders are now travelling to Tasmania and seeing the excellent lifestyle that we have and putting greater pressure on our services and facilities—we see the provision of services, particularly in urban centres, so of course people have expectations. The members here who represent rural electorates well and truly understand the demand that people rightfully make for good TV reception. I cannot think of another area—except for taxes—that gets people so upset. The pressure is on local governments to make applications for black spot program funding and then of course they have to deal with the ongoing maintenance and so on. That is just an example of the problems they have.

I was very pleased to find that the committee has recommended that there should be a major summit where the three levels of government could meet to determine—rationally, carefully, cooperatively and responsibly—the particular roles of government and an equitable way of funding these roles and the provision of services. It is the only responsible thing to do; it is the only commonsense thing to do. Isn't it remarkable that every 10 years we have a recommendation that says, `Let us have a summit to determine what our roles and functions will be, and let us have a summit to determine what funding mechanisms we should use'?

One of the things that clearly comes through in this report, particularly in chapter 7, the way forward in terms of the framework for cooperation on regional development, is that funding should be direct in many instances and that there should be an equalisation mechanism so that communities rightfully expected to carry out particular services have the ability to be funded for those services. We need to equalise, because they have a lesser ability to raise funds in terms of rates, fees and charges, and that should be taken into account. I think it will lead more and more to the development of regional governments and take the burden off state governments in terms of distribution.

But one of the sensible recommendations—amongst many—in the report is that local government must be responsible for auditing its services and its infrastructure. If there is funding for particular things the local government must clearly indicate where it is spent. If you look at the Roads to Recovery program of this government, for whatever the motivation, the local governments have seized upon it because it is an absolutely vital area to most of them, particularly rural and remote ones, and the incredible expenditure and demands on them for the maintenance of roads. I think that program is a good one. We could possibly argue that it could be better targeted, but it is the type of program indeed that people are looking for, and the Commonwealth has every right to make sure that those moneys are properly spent.

I congratulate the committee on its recommendations. I would like also to congratulate my local councils—there are nine that make up the Mersey-Lyell or Cradle Coast region. They have together funded and founded the Cradle Coast Authority, which I think is a novel authority in terms of coordinating regional development for my area in particular. They are entering into specific partnerships, both with the Commonwealth government and the state government, for the distribution of funds and for them to be an advisory body in developing programs that have been determined by the region as a whole rather than by individual councils. I think that certainly is the way of the future—a way that is recommended in this report, particularly with reference to partnership agreements in recommendation 14. Congratulations to all involved.