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Wednesday, 4 February 2009
Page: 502


Mrs HULL (6:52 PM) —I rise in the House today to speak on Appropriation Bill (No. 4) 2008-2009. I want to make reference to the fact that I will be quoting extensively from a study, which has come from the Australian Local Government Association, titled the National financial sustainability study of local government. It is a PricewaterhouseCoopers report that was released in 2006. But, whilst I quote extensively from the study, it is not verbatim. I just wanted to put that on the record for Hansard. This report has drawn upon studies by Access Economics for state local government associations in Western Australia, South Australia and New South Wales, as well as a detailed analysis by the Municipal Association of Victoria. The research was complemented by financial analysis of over 100 Australian councils.

I rise to speak specifically on this because I would like to go to the possibility of a constitutional recognition for local government. Within my speech on this appropriation bill, which deals with local councils and local government issues, I will also try and touch upon the drought relief and drought measures within this bill. I want to talk about some of the issues associated with drought and a single desk, particularly for wheat growers within my electorate, but I do want to raise the issue of whether or not we should constitutionally recognise local government.

I was formerly a councillor of Wagga Wagga City Council. I was Deputy Mayor of Wagga Wagga City Council prior to coming into this House. Local government, being the government closest to the people, deserves recognition. I personally believe that we need to revisit the issue of constitutional recognition of local government. It is a fact out of this report, and I know, through working closely with local governments right across my electorate of Riverina and beyond, that local government is responding to rising community expectations. There has been significant cost shifting, particularly from the New South Wales state government, to local governments. In the last few years what was once a New South Wales state road has been downgraded to a local road so that it has gone off the New South Wales government’s books. It is incumbent upon local government, when the supply of medical infrastructure is low or doctors are not available, to try and find solutions and resolutions. There is a growing expectation that local governments will provide the range of essential services and infrastructure that underpin local communities.

The growth in input prices generally has exceeded the average rate of revenue growth, resulting in a significant number of councils who are now developing financial deficits. That is significant, because many decisions are imposed upon local government. Take, for interest’s sake, when there was a separation of land and water. The proponents of separation of land and water did not anticipate the impact that separation would have on local government, particularly in my electorate of Riverina. Water was always the most extensive of financial assets in land and water, particularly in the MIA and around the Hay area. When the water value is high, you have a separation and there are no rates applied to water, council is left with an enormous shortfall of revenue with nowhere else to get funds. Rates revenue then comes only from land, the value of which may go down by two-thirds. Yet, local government is still expected to provide the same facilities. So there has been a tendency for local governments to defer or reduce expenditure that could aid and abet infrastructure renewals in their local government areas. Councils may have no option but to cut back on the level of local community services and infrastructure, for the very reasons that I have just pointed out.

The PricewaterhouseCoopers report says that up to 30 per cent of local government councils might not be sustainable, and I think that is a tragedy. I think it is an absolute tragedy. That report is consistent with state based reports that between 25 and 40 per cent of councils in states could be financially unsustainable. This report, which was done involving local government, called for a range of reforms to deal with the national total backlog in local government infrastructure renewal work. That was worth an estimated $14.5 billion. During our term in government, we delivered Roads to Recovery money directly to local governments and they directly spent it. No money was siphoned off by the state bureaucracies. I believe that should take place in health initiatives. I lobbied hard when we were in government to get health money delivered directly to local governments, and we succeeded in many of the programs that we put in place. But there is a greater need to deliver money directly through local government and to bypass states. Am I a proponent of the dissolution of states? Probably yes. I am certainly not a proponent of local government not getting recognition.

Many community centres and aged-care facilities, health clinics and sport and recreation facilities were established in the 1950s—and earlier—and are not being sufficiently upgraded because local governments have a lack of funds. A detailed analysis by Access Economics of over 441 councils completed over 2005-06 across four states—New South Wales, South Australia, Western Australia and Victoria—found that the average infrastructure renewal backlog per council was $20.8 million. This is significant because they seem to have to provide an enormous number of services that were once provided by the states.

If this average result is applied across 700 councils, the aggregate national renewals backlog would be, according to this report, around $14.5 billion. The estimated funding gap to clear the backlog and to cover the annual underspend on renewals was estimated in this report to be $3.1 million per council per annum, or a $2.16 billion package nationally. This indicates the plight of local government. But the sustainability problem is typically more acute in our smaller councils, which are primarily in rural and remote areas. It is a significant issue for numerous regional and more remote communities, and local government is generally the only institution present in many of the economic activity drivers in these areas.

So it seems that over the past 30 years the range of functions that has been undertaken by local government in Australia has expanded well beyond the physical infrastructure of roads, rates and rubbish that we have always seen, and it does include an enormous number of important social and human services. Again, as this report indicates, this has come about through a combination of community pressure and expectations, state and Australian government inducements, and the withdrawal of services by other levels of government.

For many of the 60 per cent of councils that are rural or remote, static or declining populations have tended to translate into static or declining revenue. Councils in agricultural areas have more pronounced viability problems than their metropolitan counterparts. These councils typically appear to have a relatively larger scope for internal reforms, but they battle against lack of scale, so they cannot share resources because of the tyranny of distance and the expectations of their community, and they really do require additional funding for community infrastructure.

There were programs that were funded under the old Regional Partnerships program that renewed and built community infrastructure. Whilst I stand, I will declare that I had enormous success in my Regional Partnerships projects. Each one of the projects in my region stacks up on its own merit and I will back them 1,000 per cent. Each delivered, in spades, benefits to the community. I will never, ever say that the applications from the communities that I represent were funded on the basis of anything but merit.

I have local governments and councils that are having to refurbish community centres and public halls, and upgrade senior citizens centres—make provisions for senior citizens centres. They are responsible for the renewal and refurbishment of theatres, galleries and museums. Hay used to be an area I represented, and that little town has five museums, including curators. It is just an extraordinary town. I love Hay—I was so sad that it was removed from my electorate—and I will continue to represent the needs of Hay, because it is a vibrant, can-do community that continually gets kicked and knocked back because government decisions impact on it enormously.

There is also responsibility for the enhancement of main streets and the upgrading—in more coastal areas; certainly not in mine—of boat ramps, jetties and wharves. Above all there is the upgrading of recreational facilities to enable communities to come together: swimming pools and playing fields. These are essential recreational facilities for rural and regional communities. Councils are also responsible for the improvement of park equipment, such as playgrounds, benches and barbecues, because the people who inhabit rural and regional communities also have an expectation that they deserve a quality of life and deserve to enjoy these things. Local governments and councils have an amazing amount of responsibility that is certainly not understood.

I tried desperately—and I will continue to try—to get what I call the Runways to Recovery Program funded, the R2R of aviation, for airports in rural and regional communities to upgrade and maintain aerodromes, airstrips et cetera. The airports are used to fly in essential services such as health services, including mental health services. In many cases the fly-in services provide the only access that these communities have to health services.

There are libraries and information centres. I note that the Prime Minister’s package includes upgrading libraries. That could certainly help local government. Then there is the refurbishment of kitchen and council facilities which provide meals on wheels. These are things that local governments and communities provide for members of their communities. These are things that fall to the local governments to do. I stand here recognising as best as I can the enormous job that local governments do. Why shouldn’t they have constitutional recognition? Why shouldn’t they be completely included in budgetary processes et cetera? I feel very strongly about this, and I felt that this evening was an obvious time to raise this issue.

I will finish by highlighting the impact that the dismantling of the single desk last year had on my electorate. I have farmers who are at breaking point. They have just tried to market their grain and have been told that the 27 tonnes of prime hard wheat they have just delivered out of the millions that they should have is worth less than the price of feed wheat. That was just a few months ago. We have imposed this significant decision on the people who live in rural and regional Australia. They are incensed about the decision to deregulate the export wheat market in a year such as we have just had. It has been a horrible year. Of all the years to make a decision of the magnitude that was made by the Rudd government and the minister! We were staring down the barrel of the subprime collapse. It was certainly not the year to irreversibly put wheat farmers against the wall.

In the month the Labor Party deregulated the wheat desk they concentrated on workplace changes and the rights of unions to again dominate a workplace and to collectively bargain in the sole interests of workers yet the minister removed the right of growers to collectively bargain with their grain. Minister, you have taken away their rights. You have given rights to every other Australian and have removed the rights of my growers to collectively market their grain. They are now at the mercy of these grain traders who are simply not able to be found. They have picked off my growers one by one. It is a tragedy. I will continue to outline and highlight this tragedy not because it is a political issue but because it hurts and burns my heart and my soul intensely to see the people I represent so badly affected by that decision.

The pools that are operating at the moment are ineffective. They do not have the advantages of a large national pool. There is no parcel of grain accumulating with enough hedging attached to it to offer any sort of competitive pricing. I have had AWB openly making it very clear to growers that the pools will open and close as they please and that sellers should lock in early to avoid missing out. There is no sense of security. The growers have been decimated by drought and have been hurt in recent years through forward selling grain. A large national pool would have carried stock from previous years into a weaker harvest and not have left our growers exposed to the weaker position that they now find themselves in.

I think all growers would concede that, whilst the highs of the pool may not be the one-off extreme high-buyers or risky futures-swaps might offer, the plummeting lows could certainly have been ridden out and their effects cushioned. The price of Australian grain has fluctuated substantially through domestic consumption and demand. During this drought the demand has been worth $100 per tonne to the grower, which effectively has meant that grain has been worth more than the US futures price. Our basis has gone from positive to negative, however, and is now negativing our grain to the tune of A$40 to A$50 per tonne in comparison with US futures pricing. We have a tragedy. There is not a single national pool to ride the current lows and carry grain for longer periods to ensure a greater average return coupled with an upfront payment to keep farming entities afloat into sowing.

It is a harsh reality that our bank managers are not willing to sit back and let farmers carry their grain to attempt to avert the current paltry returns. Much was made during that inquiry by both Liberal and Labor senators of the fact that grain could be stored on-farm or warehoused at receival sites. I kept saying, ‘This cannot happen; this is simply a nonsense,’ and that is exactly what it was. Until a few days ago farmers in our area were holding prime hard grain valued at $270 per tonne. Its value has now fallen to less than $240 per tonne. If they were to hold this grain, as was suggested in this inquiry, and store it on-farm, it would cost them 10 per cent interest on their overdrafts, which would easily take off $13.50 per tonne. Six months of warehousing at receival sites would have cost $1.25 per tonne per month in storage fees, which would equate to about $7.50 per tonne. So, before growers could even get out of bed they would need to be looking at $300 a tonne to profit if they held onto the grain. This is what we were trying to explain. This is just a nonsense.

Appropriation Bill (No. 4) talks about drought. I talk about reality. This is a travesty of justice. This has been imposed upon the people I represent. I detest what has been done. I feel strongly about this, and I will not stop raising it until some relief is given to those people who have been so badly affected by the policies of this government.