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Tuesday, 9 June 1970


Mr WHITLAM (Werriwa) (Leader of the Opposition) - Yesterday the Federal Council of the Liberal Party met to decide what that Parry's policy should be towards what Liberals call the crisis in CommonwealthState financial relations. It is significant that these relations reached crisis' proportions at a time when the coalition parties had a monopoly of every government, Stale and Federal, in this country, a monopoly broken only last Saturday week. For over 2 years all 7 Treasurers were Liberals. In this same week the Commonwealth Parliament will be asked to impose an unjust, unnecessary and unpopular tax on behalf of State governments which allege that they were first obliged to raise this tax - illegally as it turns out - by Commonwealth meanness and on Commonwealth urging. At the end of this month, without any discussion in this Parliament or any of the State parliaments, a new financial formula will be devised to govern the financial relations between the Commonwealth and the States for the next 5 years. In all these matters, in all these discussions, nothing will be heard and nothing will be said on behalf of the area of government facing the severest test and carrying the heaviest burdens - the third, the silent partner, the local and semi-government authorities in this nation.

The plight of local and semi-government authorities illustrates the characteristic of Commonwealth-State-municipal finances and functions after 20 years of Liberal rule: The real characteristic is federal affluence and civic squalor. In all the squabbles of the past 2 years, not 1 of the five Liberal Premiers nor the Country Party Premier has raised his voice about the needs of local government or semi-government authorities - yet they are State creations. No national government in any comparable country accepts so little responsibility for civic problems as ours. State Liberals do not and will not speak up for local government. Liberal Treasurers, State and Federal, place more and more responsibility on local government yet deny local government adequate access to finance.

This is not by accident or mere oversight; it is inherent in that Liberal philosophy which is supposedly being hammered out in that ersatz Georgian building over the way. It suits Federal Liberals to assert that urban facilities and urban services are matters for the States: it suits State Liberals to assert that these are matters for civic authorities, because it is the Liberal way not just of passing the buck but of restricting public expenditure and conscripting public' authorities. The whole meaning of the present phoney war about State rights is the protection of private affluence and the perpetuation of public squalor. In their treatment of local government and semigovernment - their clients - the States parallel the parable of the unjust steward; they beg justice from the rich lord, but deny it to their own servants.

One of the applications of the Liberal philosophy has been to hide the real extent of the burdens of taxes and charges carried by the people. This has been achieved by obliging the States and still more the semigovernment and local government authorities to raise more and more finance by the inherently unfair means available to them, while Commonwealth affluence has been guaranteed by the simple expedient of leaving the tax schedules unchanged and letting wage rises and inflation do the rest. Consequently in the past 20 years Commonwealth revenues have .increased 7-fold; but State revenues have increased more than 9-fold while local government revenues have multiplied by more than 8 and semigovernment by more than 18. The true picture of public financing becomes clearer when we examine the debt situation of the various authorities. Since 1947 the Commonwealth debts have fallen: the debts of the States have increased more than 4-fold; local government debts have increased more than 9-fold; semi-government debts more than 1 2- fold. In 1947 the debts of local and semi-government -authorities combined were just over one-quarter of those of the States. By 1968, the last year for which all comparable figures are available, they were more than three-quarters of those of the States; in less than 5 years will exceed those of the States.

In 1947 the loan repayments of semi and local government authorities were about seven-tenths of those of the States. Today they are nearly double those of the States. Their interest rates now will be the highest in our history because they must be half of 1% above the rate on Commonwealth bonds.

Between 1954-55 and 1965-66 the number of cents taken in debt charges out of every dollar received in local government rates rose in New South Wales from 17.6 to 22.2. Between 1954-55 and 1967-68 - because the other States give figures 2 years later than those that the New South Wales Government provides - the number of cents taken rose as follows:

From 9.9 to 15.8 in Victoria: 29.8 to 33.2 in Queensland; 7:8 to 12.7 in South Australia; 10.2 to 16.7 in Western Australia. 21.5 to 33.8 in Tasmania.

The Liberal Party Council in its new manifesto calls upon the Commonwealth to share with the States the opportunity to use revenue monies where necessary for works of a capital nature'. If this is proper for the States, it is proper for local and semi-government. Under the existing set-up; the States create authorities to provide the services basic to every modern civilised community, and then leave them to fend for themselves.

The statistics alone would indicate how much local and semi-government finances have become a national problem. Figures of this magnitude obviously cannot be ignored in the nation's overall economic management. It is unreal to distinguish' Australian taxpayers from Australian ratepayers. There are not some people who pay rates and some who pay taxes and some who pay transport, electricity and water charges. They are, by and large, the same people, and they arc ail Australians. The national responsibility is clearer still when we realise how financial and legal realities reinforce this simple human reality. Local and semi-government authorities have been created by the States; the Commonwealth accepts responsibility for providing most of the income of each of the States. Further, the States exact statutory contributions from local government for road, street lighting, fire, planning and similar authorities. The Commonwealth has refused to seek statistics on such burdens although, together with debt charges, they pre-empt not less than one-third of local government revenues. In New South Wales I have been able to ascertain that last year councils had to contribute $7.8m odd to the Department of Main Roads, $1.876m to the State Planning Authority and SI. 4 18m odd to the Board of Fire Commissioners.

Most important of all, the Commonwealth determines the loan raisings of local and semi-government authorities by virtue of its practical domination of the Loan Council, lt is just flying in the face of financial, legal and human fact to deny that the Commonwealth has any responsibility for local and semi-government finances and functions.

The squeeze on their finances is creating squalor in the functions they must fulfil and the services they must provide. It seems to be thought that only mayors and shire presidents should concern themselves with the problem of local government. We are thought to be demeaning this Parliament by mentioning such mundane topics as, say, sewerage. I suppose I am the only leader of a national party in the English speaking world to concern myself with these problems since Disraeli successfully campaigned in the 1874 elections on the slogan Sanitas sanitatum, omnia sanitas' which, freely translated, means 'Sanitation is everything'. He introduced the first of the modern public health acts which revolutionised sanitation in England. Disraeli did more for the English people by building sewers than by buying Suez.

The truth is, of course, that the sanitation standards in Australia are worse than those in any comparable country. The Statistician furnished the former Treasurer with an answer to me on 25th February last year which showed that in 1966 the estimated percentage of population served by sewer age services in the State capitals was. as follows:

The Statistician has not yet completed an investigation required to obtain later information, lt will be noted that the position is only tolerable in the two cities, Adelaide and Hobart, where a State government department has the responsibility of supplying the service. In each of the other capitals the State government has given the responsibility to a large semi-government or local government authority which the State government is most reluctant to assist or champion. The Loan Council can approve borrowing allocations for sewerage services but has done so only once - for Brisbane in the period 1962-65. The unsewered areas are the developing areas of our cities where most migrants and most children live.

The role of local government goes far beyond the provision of such basic services as sanitation. In modern societies the ro'e of local government is increasing. There are few aspects of our environment, our culture or our welfare which can be adequately tackled without involving local government. Ours will not be a modern society until we permit local government to widen its role; it will be unable to do so as long as the financial squeeze on local government persists. In particular, modern societies require that a great deal of work hi the social welfare field be carried out by local authorities. Our inadequate and antiquated system means in essence that the Commonwealth will provide cash benefits and the States will provide some direct assistance in forms which were devised during, and have changed little since, the depression. Increasingly the need is for advice, counselling, retraining and- direct assistance. This can be provided best, and probably can only be provided, on a regional basis, which means local government must be increasingly involved. Yet the Commonwealth has no information on the number of qualified social workers employed by local government. My colleagues produced very little reaction from Government members when they advocated the role of local government in' debates this year on Bills dealing with assistance for handicapped children, aged persons'- homes and Meals on Wheels.

Inequality in Australia is more public than private. A family's standard of living will be determined much more by where they live than by what they earn. The inequalities between regions are now far greater than any between States and are indeed greater than they ever were between States. In developing regions the inequalities and the burdens are growing. The areas with the greatest needs are precisely those with the least resources. The Commonwealth Grants Commission was set up to advise the Commonwealth on the fairest way to help the smaller States to provide services' equal to those of the larger States. The Commission should now be asked to recommend the amount of Commonwealth assistance required to remove the inequalities in servicing our developing suburbs and regions.

There are two reasons why local government needs have been so badly neglected in Australia. The first I have already mentioned: It is a direct consequence, an inherent feature, of the Liberal philosophy and the Liberal approach. The other lies in the present federal system. We have 6 State governments to speak stridently if ineffectually for their interests; even 6 Liberals can be brought together in the same room. But there is no-one who will speak for our 900 local and semi-government authorities. They themselves have failed to speak either collectively or regionally. It is unrealistic to expect that regionalisation of functions can be achieved without a rationalisation of finances. What is required is a new Financial Agreement which will take into account the needs not of 900 local authorities but of the few score regions into which this nation is clearly divided. Those regions have very little to do with the artificial boundaries arranged by the clerks at Whitehall in the middle of last century but have everything to do with the natural growth of this country over the past century.

The outer suburbs, the developing regions of this country, have far too great a burden to be met by those who pay rates and charges to local government authorities and semi-governmental authorities. Why is it that so much more of the rates for the developing areas on the outskirts of our capital cities is now pre-empted not only for the statutory contributions but for debt charges? Why is it that the developing areas of our country such as Wollongong, Whyalla, Mount lsa and Gladstone, have to pay so much more for these features? Why is it that the cost of electricity is so much greater in all the coastal cities of Queensland than in other cities of Australia which are nowhere near their size? I fear a great opportunity has been lost for the rationalisation and regionalisation of CommonwealthSta'temunicipal finances and functions in the. new Financial Agreement. My colleagues who lead the Parliamentary Labor Parties in all the States and my officer bearers in the Federal Parliamentary Labor Party have discussed all the features of finance and functions at Commonwealth, State and' civic levels. We cannot wait 5. years for yet another agreement; happily we need only await a new government which will take those initiatives required to begin the task of modernisation of the ramshackle structure of finances and functions which bear so heavily on the people for so inadequate a return.







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