Senator IAN MACDONALD (Minister for Regional Services, Territories and Local Government) (4:24 PM) —We respect and understand local governments. The whole purpose of this bill and this initiative from the Howard government is to get money to councils for use in upgrading and maintaining local roads. We have made a massive commitment of $1.2 billion, and we want to see it happen. We think local governments are the best people to get this work done efficiently and expeditiously, and everything we do follows that intention. Why would we do otherwise? We have committed the money and we have distributed it in the most fair and open way possible, one that has been universally applauded by local government—and I stress `universally applauded'—because local government understand the formulas, they understand how fair they are, they know they have been working on those for years and they are amused that some people involved in this debate yesterday simply did not seem to understand how things currently work. But that is fair enough; I will leave that.

The only real condition we have on this whole thing is that the funds must be spent on roads. Under the current act, I will call it the Labor act, the 1994 act, the moneys the Commonwealth gives to local authorities are identified as roads grants. They are calculated on a formula that the state grants commission relates to roads. But, having received the money, the councils can then spend it on anything. They can spend it on a publicity unit or a social worker or whatever, and that is the way that act is set out; we are not trying to change that. But with the Roads to Recovery Program, we are insisting that the funds be spent on roads. To do that, we are asking councils very reasonably to explain to us what they are going to do. These conditions have not been put together yet, but I think we will be saying to councils, `We want to know what you were going to do before this money came along, and we want to know what new or different things you are going to do or what things you are going to bring forward,' just so that we can be assured that they are not cost shifting and transferring some money that they were going to spend on local roads to another program and then using this money to do what they intended to do anyhow. So the conditions will relate to that.

Senator Mackay asked about the timing of the payments. The act provides that the amount be payable in one or more instalments and that the amounts and timing of the instalments are to be determined by the minister. We have indicated publicly that we want to get out the first instalment in February if it is at all possible. We have indicated that it will probably be a quarter of an annual payment that will go out in February. We have also indicated—and I think the bill says—that, where there are only small amounts involved, we can pay the total amount in full, up-front. But we want to help local government, and we will work with local government, to get that money out in the very best way possible. We will continue the excellent working relationship we have with both the Australian local government executive, its president and vice presidents, and the state local government associations with whom we work very cooperatively and well. We will be working with them to make sure we get this money out in the best possible way.