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Tuesday, 12 May 2009
Page: 3542

Mr ALBANESE (Minister for Infrastructure, Transport, Regional Development and Local Government) (8:13 PM) —I move:

That this bill be now read a second time.

This is a bill to amend the Federal Financial Relations Act 2009 and the Local Government (Financial Assistance) Act 1995.

The global economic recession is the great challenge of our time and the Rudd government has made dealing with its impact a priority.

Tonight I introduce a bill that will assist Australia deal more quickly and therefore more effectively than it otherwise could. The Financial Assistance Legislation Amendment Bill 2009 will provide the government with greater flexibility to assist local government in Australia.

We know that the global economic recession is placing new pressures on local government across Australia. We have seen reports from the Australian Local Government Association that councils are facing increased defaults on council rates payments. And, while record low interest rates are assisting families with mortgages, many councils are seeing a reduction in their level of investment income.

The government’s financial assistance grants provided through the Local Government (Financial Assistance) Act is an important mechanism to provide ballast in the balance sheets of local government. On average these grants contribute around seven per cent to council revenue.

Earlier this year the government was able to bring forward the fourth quarter’s grant payments to Victoria and Queensland to assist disaster-affected councils. That decision helped affected councils manage cash flow at a critical time.

More broadly in Australia, however, we face the challenge of the global economic recession. Until now the act that provides Commonwealth funding to local government lacked the means to bring forward some payments from a future year to the current year.

The bill I introduce tonight remedies that situation.

The proposed amendments for theLocal Government (Financial Assistance) Act 1995 will increase the Commonwealth’s flexibility to provide additional funding in a particular year, including by, in effect, bringing forward funding from a future year, when economic or other special circumstances warrant such measures.

The other element of the Financial Assistance Legislation Amendment Bill 2009 relate to the Federal Financial Relations Act.

Other government decisions taken in the 2009-10 budget will require an increase in the general drawing rights limit for the 2008-09 financial year for the purposes of section 9 of the Federal Financial Relations Act 2009 so that the necessary payments can be made. To do this, the bill will increase the general drawing rights authorising debits from the COAG Reform Fund for the purposes of making grants of general revenue assistance to the states in the financial year starting 1 July 2008. I commend this bill to the House.

Debate (on motion by Mr Pyne) adjourned.