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Thursday, 1 June 1989
Page: 3215


Senator BISHOP(1.33) —The Local Government (Financial Assistance) Amendment Bill 1989 is, once again, an example of the Federal Government not being prepared to wear its share of pain in cost cutting. It is determined to make not only the State governments but local government wear the pain and make the serious cuts that need to be made. Of course, this Government has a poor and paltry record in dealing with local government. Firstly, it has chosen to change the tax sharing arrangements which existed from 1976 when the Fraser Government introduced legislation to enable local government to have a share of personal income tax. In fact, local government was given up to 2 per cent of money from this source and, on that basis, it was able to plan in an adequate way.

This Government chose to alter those arrangements in 1986 when it decided to fund local government by way of financial assistance grants. The proposal at that time was to tie that amount to general purpose grants and the amounts given to State governments. This enabled local government to budget and plan the money in a predictable way.

But in recent times the Government has changed its mind again. It has treated State governments poorly by reducing their general purpose grants. For the second time we are amending the legislation which originally tied local government to State government grants. But for this arrangement local government would receive even less money than it is getting under the proposed amendment.

It is interesting to observe that at the time the Federal Government has chosen to cut by a considerable figure the grants to State governments and, indeed, to cut local government grants in real terms by 3.8 per cent, it has given itself an increase through its own general purpose grants of 5.5 per cent. To put a finer point on it, Tasmania, will, for the first time, receive a grant which is lower in monetary terms. That is despite the fact that, in the second reading speech to the 1986 legislation, the Government said that the reductions were being made because of a changed method of assessing the amounts of money that should be given to each State. It said that this would be done in such a way that there would be no reduction in the payment to any of the States in money terms from one year to the next. So the Government's own undertaking given in its second reading speech on 2 May 1986 is in fact being breached this year because Tasmania will in fact receive less money in monetary terms. But, as I said, across the board local government per se is receiving an effective loss of 3.8 per cent.

Unfortunately, local government is being used as a tool by the Federal Government in that the Federal Government has attempted to pass on to local government, without providing adequate funding, functions for which it hitherto had responsibility. I think it is fair to say that local government, as the third tier of government, has a most important role to play because it is so close to the coalface, as it were. It is the closest level of government to the people and, as such, it is often better placed than particularly a centralised Commonwealth government and, indeed, sometimes by State governments, for the delivery of particular services. But, in our view, there has to be a realisation that, if there is to be a devolvement of function onto local government, local government should carry out that function and be funded in a proper way so that it can properly exercise the responsibilities that are given to it.

We have all focused in recent times on the role of local government and how it fits into our federal system. From the Opposition's point of view, it is important and vital that local government be seen to be an important vital third tier of government. As I said a little earlier, it is the tier of government which is closest to the people. It is, of course, the tier of government which most often hears complaints-to a greater extent than perhaps people in this chamber-about the things that affect people in their day-to-day lives.

In 1986 the Government chose to go a certain route and in its second reading speech on that occasion it said that one of the reasons for deciding to tie local government grants to State government grants was that these new financial arrangements would provide a stable financial base from which local government would be able to plan with a greater degree of certainly than under the previous arrangements. It said that the volatility that characterised the previous tax sharing arrangements would be eliminated. Of course, it is the Government's deliberate decision to cut State grants that has brought about the need to introduce the Bill that is before us today. Local government and State governments need to be able to expect a constant level of funding so that they can plan sensibly. This Bill will ensure that the cut that they are suffering is not as great as it otherwise would have been.

Of course, local government generally has a responsibility for roads. We see a constant disregard for the proper funding of that responsibility which local government has to carry out. Quite clearly, the Government pays lip service only to the third tier of government. The Government has a cynical view, in that although it has transferred functions to local government and is not prepared to make the hard decisions, it has made local governments suffer cuts while giving itself an effective increase in general purpose funding.

In the overall context of federal affairs, we know that the Federal Government has a centralist attitude. We know that its concerns for the proper devolvement of power, both to the States and to local government, is not a genuine one. Most often, it is a token gesture. The true intent of this Government, as we see in so many pieces of legislation, is to have a centralised function.

The Government has indulged in window-dressing. From time to time it has embarked upon quite dishonest campaigns. Its rhetoric that it is interested and concerned about any particular endeavour in Australian life has been shown to be, in fact, paltry words with no substance at all.

It is important for local government to have adequate, proper and predictable funding. In this respect, it is not well served by the Government's present legislation or its 1986 legislation. Nonetheless, it is important that the money that has been allocated be received by local government as quickly as possible. This Bill will facilitate the passage of that money. At least local government will have some funds to carry on the continuing work which is growing and burdensome to ratepayers. As I have said, we are most critical of the attitude that the Government has shown. It took a decision at the Premiers Conference first to cut State funding and then to cut local government funding. It is prepared to take an increase but it will not look at government expenditure cuts in any real way.