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Tuesday, 25 November 2003
Page: 22836


Mr NEVILLE (6:27 PM) —The main objective of the inquiry of the House of Representatives Standing Committee on Economics, Finance and Public Administration has been to investigate the serious problems of cost shifting onto local government and to provide some solutions so that that particular sphere of government is appropriately, effectively and efficiently financed so that it can continue to serve the community.

I commend the members for Wannon and Chisholm for their excellent report entitled Rates and taxes: a fair share for responsible local government. This report has long been required. What I liked about the report was the obvious air of bipartisanship, which is excellent, and that it does not make 40 or 50 recommendations which advocate more reports. This report makes 18 recommendations, many of which are very hard hitting.

The committee has put on the record its disappointment at the lack of input from state governments, one of the seminal areas that we should be looking at. I am not surprised that the Queensland government has failed to make a substantial contribution to the debate. There is no doubt that our local government authorities are carrying a greater load in providing services to the general population. It goes well beyond the traditional local government areas of spending on roads, water, sewerage, rates, parks, gardens, theatres, halls, libraries, sporting facilities, showgrounds and public health—all the things that we have generally associated with local government—and gets into areas of health, aged care, transaction centres, TV, mobile towers, community policy development, social services, tourism and, in some areas, even community policing. It is a very diverse field.

The member for Chisholm made a very good point: some of these things have been thrust on local government but some have been accepted in a voluntary way. I think councils need to take a step back and look at the areas in which they are expert and make sure they do those well first—the old dictum of stick to your netting so to speak. By anyone's standards local government's responsibilities represent a serious and significant undertaking which directly affects the social, economic, environmental and cultural life of 20 million Australians—in my case 3½ million Queenslanders. Councils large and small play a vital role in contributing to the lifestyle of their communities and maintaining the level of service expected by ratepayers.

Sadly, though, whether it be tick inspection services or health services, it would seem that our local councils are bearing a greater brunt of the shifty fiscal practices of many of the state governments—and I include my own state government amongst those. For example, these practices, although not cost shifting as such, are part of the rigmarole that the Queensland government has been going on with for the past year or so. One of the best examples of this is the Beattie government's attempt to offload to local councils the responsibility for collecting $88 per head ambulance levy. This move was vehemently opposed by the Local Government Association of Queensland, and quite rightly so. To the credit of the local government authorities throughout the state, which objected to the state government's blatant actions, they raised merry hell and managed to have the decision overturned. In the face of damning headlines, Mr Beattie soon backed down, although his Treasurer, Terry Mackenroth, contended that there was no doubt that using local government rate systems was the most efficient way to collect community ambulance cover. I say to Mr Mackenroth that I for one credit our councils with being more than a collection agency for higher authorities and a mere conduit for carrying out the policies of state and federal governments; they are a tier of government in their own right and need to be respected as such.

In the end the Beattie government capitulated on the collection of this unfair, unequitable and wholly unpopular levy. But, just as capriciously as it had tried to pass this on to local government, it passed the responsibility on to the state's electricity providers, with residents having to pay an extra $22 per quarter on their electricity bills. The desperation of the Queensland government to pocket this extra revenue has been demonstrated against by angry residents, who simply refuse to pay the levy and thus face having their power cut off.

But what is more concerning is the ethos behind the whole implementation of the levy to keep the Queensland Ambulance Service afloat. This service was once financed partly by the state government and partly by ambulance committees. It is now down to the average Joe in the street to fund this service over and above the taxes and charges he already pays. The ambulance levy is expected to raise $110 million in the first year of operation. This in effect is a shift of the cost from the state government back to the public.

But at least our local councils have managed to win the argument that they are not merely a collecting agency for an increasingly remote state government. It is quite telling that the LGAQ, in its own submission to the inquiry, estimated that the overall financial impact of devolved discretionary and compliance requirements from other levels of government amounted to $80 million per annum in outlays. With $33 million being received in revenue from grants, fees and charges, this cost shift was estimated to be about $47 million, which is a lot of money. When you divide that by 150 councils, it is a lot of money that filters down to ratepayers.

This cost shifting onto local government authorities is not solely down to state governments, but the findings of the inquiry point to the majority of incidents occurring between these two levels of government. The major areas of cost shifting reported were the withdrawal or reduction of financial services or support once a program is established, thereby leaving local government with the choice of continuing the program or suffering the political odium of cancelling the service; the transfer of assets without appropriate funding support; the requirement to provide concessions and rebates without compensation payments—a typical example is a seniors card, where the state government say, `The council will give you 10 per cent off this and that,' but no compensation comes back to the council; increased regulatory and compliance requirements; and failure to provide for indexation of fees and charges for services prescribed under state legislation or regulation. I am quite aware that these practices are taking place within my own electorate and the electorates of most members who are in this chamber today.

One specific sphere which seems to be slipping from the hands of the Queensland government into the lap of local governments is the provision of health services. I am all too familiar with this in my own electorate. The Discovery Coast Health Service at Agnes Water, which is midway between Bundaberg and Gladstone, obtained a Commonwealth funding outlay of $2 million to be spread over three years. This was made available by the then minister, the Hon. Michael Wooldridge, in the form of recurrent expenditure. An approach was made to the state government just to provide the headquarters for this particular organisation, and my state colleague the member for Burnett announced in parliament that a $600,000 health centre would be provided.

This did not occur for some time, so I went to see the member for Burnett. I said, `What's happening about the health centre? A $600,000 health centre would be marvellous.' He said, `There's a bit of a problem there,' and I said, `What's that?' He said, `We are going to build a $600,000 health centre, but we were hoping you would put in $500,000 from the Regional Solutions Program.' So when the state government failed to deliver on this promise of $600,000, the federal government had to provide another $165,000 towards the capital costs of purchasing leased premises. Although there were some budgeted rent savings from these leased premises being purchased, it meant a notional capital outlay of $200,000 to the Miriam Vale Shire Council.

Miriam Vale Shire is the fastest growing mainland shire in Queensland, as identified in the 2001 census. It has a relatively small ratepayer base but a rapidly expanding coastal strip in and around the twin boom towns of Agnes Water and Seventeen Seventy. Miriam Vale Shire is already struggling to provide core services like water and roads to its ratepayers, and there have been growing pains in the form of annual rate rises. However, the Miriam Vale Shire is shouldering, in addition to the money given to it by the Commonwealth, a further $250,000 a year to keep the Discovery Coast Health Service running. Bear in mind that that is in addition to the capital outlay of about $200,000, which was the shortfall from the state government not providing the centre. I have also been told—and I have not been able to verify this—that the Bundaberg District Health Service, which as a state government instrumentality is supposed to cover this area, not only does not provide the services but actually charges the Discovery Coast Health Service for the services that it does provide. There is no question that the council and the local residents value the service and see it as a high priority for the community. But, in the words of the local CEO Lindsay Thomas, the Queensland government has contributed sweet BA to the centre and its ongoing costs.

Another case in point is the provision of tick inspection services, which are within the domain of the Department of Primary Industries. In its wisdom, the Beattie government is in the process of transferring the responsibility, plus the cost of collecting the fees, to accredited commercial operators. The user-pays service is now being phased in and will be fully operational by 2004, with the promise of more flexible and wide-ranging services to property owners. Somehow I doubt that. I envisage that a system which relies heavily on local government authorities will have to fund additional staff and will come at a massive cost to the user. What will happen in many areas is that, where there are no local providers, vets or other people in animal husbandry, the local shire council will have to provide that service.

I fail to see any justification for this cost shifting by the Queensland government, but I suppose fiscal responsibility has never been a strong suit of the ALP in Queensland. Let us not forget that the state government has delivered its third successive deficit budget to Queensland. In his leadup comments to the release of this year's state budget, Treasurer Terry Mackenroth sounded very confident about providing more support for health, education, disability services and the like, but instead he brought down an operating deficit of $350 million. I find that difficult to comprehend considering that between 2000 and 2004 Queensland will receive around $20 billion in GST revenue from the Commonwealth. For 200304 alone, Queensland is due to receive around $6.2 billion in GST revenue, which is $197 million more than the state would have received under the old formula.

To sum up, let me quote from some of the responses in this very excellent report. They include the idea that subsidy levels should be commensurate with the level of responsibility devolved to local government in meeting the requirements of other levels of government. Another quote is that `state road funding along the lines of Roads to Recovery would be appropriate. Current levels of road expenditure do not meet the depreciation expense of roads'. And most tellingly—and I end on this point—`abandon the states and have the money directly from federal government to local government'. Sadly, therein may be the only solution.