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Wednesday, 23 May 1973
Page: 2547


Mr MORRIS (Shortland) - It was encouraging to honourable members on this side of the House to hear the Leader of the Australian Country Party (Mr Anthony) confirm the worsening financial situation of local government. But he failed to mention that the present difficulties which local government faces and which this Bill aims to assist in remedying gradually developed during 23 years of determined avoidance of local government by a Commonwealth government of which he was a member. It was encouraging also to hear him express doubts about the present principles upon which local government revenue is raised. But why did not the Government of the day, of which he was a member, do something about the situation? After all, as a member of previous Governments for over 15 years, as a Minister for over 10 years and as a Deputy Prime Minister surely he was one of those who would have been in a position to assist or project the cause of local government. Or has his sudden awareness of local government developed only since he has been in Opposition? Maybe he has suddenly learnt about it from the Democratic Labor Party. Maybe this is another side benefit from the shot-gun wedding.

This legislation will do much to assist in the removal of some of the inequalities between regions and between local government areas in much the same manner as the Grants Commission has operated in the past in removing some of the inequalities between States of the Commonwealth. Those of us on this side of the House who have come here with a background of service in local government know from practical experience the constant financial dilemma that faces local government; that is, the increasing demand for services, the continuing increase in the cost of providing existing services and the limited access to revenue under which councils and local authorities have to operate.

In many local councils in New South Wales the burden on that select group, the ratepayers, has reached the limit. Despite a lengthy royal commission during 1965-66 into the problems of local government in New South Wales, very little has been done apart from the establishment of the New South Wales Local Government Assistance Fund which disburses general purpose and specific purpose grants, to implement the recommendations of the royal commission. Rate revenue based on property values only, without taking into account the principle of the ability of the ratepayer to pay is onerous and inequitable. Again, because of the system of allowing rates as a tax deduction, those on higher incomes receive a greater tax concession from rate payments than those on lower incomes.

Giving local government access to the Grants Commission for general purpose grants will do much to relieve the inequalities among ratepayers and will give the third level of government access to the Federal purse so that all taxpayers will be making a contribution towards the cost of providing local government services, and not just ratepayers. Clause 6 of the Bill defines the purposes for which grants may be made to local government - either to a local government body in a region or an approved regional organisation. Any definition of the method by which local government authorities are brought together into regional bodies is bound to find opposition from some member authority or council. In determining the regional groupings I believe the following criteria could well be taken into consideration: The philosophy of common regions for all government administration, community of interest, population distribution, the pattern of communications, topography and climate including river valleys, the distribution of natural resources, the pattern of industrial and commercial development, existing government administrative divisions, capacity to sustain a regional centre and to develop a regional identity, conformity with local government boundaries and accordance with statistical divisions.

The joining together of local authorities into regional divisions for the purposes of this Act will be an added bonus to local government. It will promote local government thinking into the greater perspective of assessing the needs and inequalities of regions. The decision of this Government to grant local government access to the Grants Commission is the biggest break-through for local government that has been made since Federation. It is an acceptance of a principle that local government associations and shire associations have been fighting for for almost 30 years, the principle that local government should receive a share of the common pool of taxation collected by State and Federal Governments. The associations' case was based on the fact that when the means of financing local government were first established councils were called upon to provide only basic services that related to property and at that time it was fair and reasonable that rates based on property values should provide the source of their funds. In later years, especially since the Second World War, councils have been called upon to provide a whole range of cultural, recreational and community services which benefit all the people and have no relation whatever to property. Because of this, the rates income from property owners should be supplemented by an allocation from the taxes paid by all taxpayers.

This case was consistently put to Federal and State Governments for many years. It was first recognised in a limited manner by the New South Wales Government in the setting up of the New South Wales Local Government Assistance Fund in 1969. Whilst the intention of this Bill is to provide additional finance to councils or local authorities for general purposes as a topping up or equalising process, work is in hand to enable assistance to be made available under separate legislation for specific purpose grants.

In the Newcastle region local government is administered by 3 city and 2 shire councils. In addition, the Shortland County Council is responsible on a broader regional basis for the distribution of electricity, whilst the Hunter District Water Board reticulates water and provides sewerage services on a different regional basis again. The 5 councils undertake a wide range of essential services in addition to those directly carried out by the departments of the local government itself. Public works, health and immunisation services, garbage collection and disposal, maintenance of municipal property, and the care of parks and reserves are major items of expenditure. The financial programs of most local authorities are dominated by high works outlays with, in most cases, a continuing rise in total annual spend ing. The improvement of living standards and constantly expanding public needs have resulted in an expansion of local government expenditure which has often exceeded the rate of increase in population.

The amount of construction of new buildings, additions and alterations in an area is a useful indicator of the growth rate of the area. During the period 1966 to 1971 the aggregate estimated value of building applications to Newcastle City Council increased by 39 per cent. The value of the applications to the Lake Macquarie Shire Council more than doubled and the value of the applications to the Port Stephens Shire Council rose by half during the 4-year period 1966 to 1969. The disparate growth in population is shown by comparing the totals of populations of the councils. During the period 1966 to 1971 the population of Newcastle increased by 1.85 per cent to 145,718, whilst the population of the adjoining Lake Macquarie Shire increased by 13.75 per cent to 122,268. In Cessnock the population rose by 1.76 per cent. The population of the Port Stephens Shire rose by 19.81 per cent and the population of Maitland rose by 8.88 per cent.

The Newcastle City Council area, for example, is almost fully developed with a strong central business district that provides something like 40 per cent of all rate revenue collected, whilst the Lake Macquarie Shire, an adjoining shire, is a rapidly developing shire spread out over a larger area with major problems of development and connection of suburban centres. It should be made quite clear that grants to local government from the Grants Commission are in no way intended to replace revenue-raising by the local authorities themselves, but they should materially assist in levelling out inequality in access to revenue suffered by the less advantaged councils. If local government is to develop attractively and flexibly it must have financial independence. A case can be established for grants for the provision of services which result in large benefits to those in the areas outside the area in which the money is spent. A case can also be justified for grants that would enable the poorer units of local government to operate at minimum acceptable standards.







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