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A plan for stronger local government

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M e d i a

R e l e a s eTHE HON ALEX S O M LY A Y MP Minister for Regional Development, Territories and Local Government


The Federal Minister for Local Government, Alex Somlyay, today released the Coalition’s local government policy, Sustaining Local Communities, which raises Commonwealth/local government relations to a new level with significant financial boosts for local government.

Mr Somlyay said “The relationship between Federal governments and local government has evolved over the years and the Coalition’s Tax Plan for a stronger Australia provides an opportunity for the next step in this evolution: a step that will simplify financial relations between the three tiers of government in a way that guarantees financial security and stability for local government.”

The Coalition’s plan is good for local government and local communities because it secures revenue for service to those best able to deliver them - the States. Due to the States’ new financial strength, they will be in a position to resume financial responsibility for local government.

“The Coalition will ensure that the financial interests of local government are fully protected in this new arrangement,” Mr Somlyay said.

“It will be an unshakeable condition of the new tax system that the States must continue the payment of annual financial assistance grants to local councils on the same terms and conditions as at present.”

> General purpose, untied, financial assistance grants to local councils will continue. > Untied local roads funding will continue. > Annual escalation factors, based on adjustments' for inflation and population growth, will continue.

“The new payment arrangements will be clearer, simpler and more direct. The arrangements will be more efficient as double handling and bureaucratic red-tape will be removed.”

Councils and ratepayers will also benefit significantly from a number of the other elements of the Coalition’s Tax Plan - for example:

> General rates will be GST-free; > charges for water and sewerage will be GST-free; > charges for compulsory rubbish collection services will be GST-free;

> charges for regulatory and licensing services will be GST-free; and > council fines and penalties will be GST-free.

Council running costs will be reduced Australia-wide by at least $70 million per year because:

> councils will no longer pay embedded wholesale sales taxes in goods they purchase; > councils will be able to claim a refund of all the GST payable on their purchases; and > councils will be able to take advantage of reductions in the excise payable, on diesel fuel.

One regional council, Shoalhaven City Council, has calculated that these measures will reduce their annual running costs by in excess of $600 000.

“Savings of this magnitude will enable councils to reduce debt, improve council services and reduce rates and charges.

“Labor neglected local government for 13 years.

“Labor now opposes lower costs for local government and their citizens.

“Local government cannot afford a return to Labor.”


21 September 1998

Contact: Graeme Hallett 0419 218 469