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Thursday, 1 June 1989
Page: 3217


Senator CALVERT(1.43) —-As the shadow Minister for local government, Senator Bishop, has said, we are debating the Local Government (Financial Assistance) Amendment Bill today. The coalition will not be opposing the Bill, but I believe it remains to us to take this opportunity to bring to the attention of the Senate the number of real concerns that local government has in Australia about the way it is being presently treated by this Government.

Most honourable senators will be aware that this Bill will amend the Local Government (Financial Assistance) Act 1986. Under the Fraser Government local government used to receive a percentage of personal income tax receipts. This was changed to a general purpose grant in accordance with a formula which was paid in grants to the States. Of course, we know that this Bill changes that again so that local government will be `a little better off', in the words of a news release that was put out from Senator Ray's office.

Since the introduction of this new formula we have seen an ongoing decrease in the amount of funds provided by the Federal Government for local government until we have arrived at this deplorable situation where in 1988-89 the only local government body that will receive an increase in real terms is Western Australia. As the previous speaker, Senator Bishop, has said, my own State of Tasmania will actually receive a decrease in real dollar terms. Once again we see a Federal Labor Government showing its contempt for my State of Tasmania.

I remind the Senate that this is a contradiction of the undertakings which were made when the original Bill was introduced and the Federal Government promised that there would be no reduction in the payment of funds to any State from one year to the next. We have seen a reduction in the payments not only to the States but, quite naturally, also to local government. The Government also claimed, ironically, that the new financial arrangement would provide a stable financial base from which local government would be able to plan with a greater degree of certainty. I do not know how many more formulas we will see to fit in with the amount of funds that local government is to receive, but I would have thought that these changes being made from year to year certainly do not provide anything stable for local government. All they have done is to prove that the Government's words were only a hollow sham. If one needs any proof of that, local government bodies have been beating a path not just to my door; those on this side of politics have had representations from local government on many occasions about the lack of funding.

The fact is that under the Fraser Government local government was provided funding of 2 per cent under a personal income tax sharing arrangement which was guaranteed. It was 2 per cent of whatever personal tax revenue was generated in real terms. If one takes the figures of that scheme that the coalition government put in place, and if one follows those same arrangements, today we would see that the amount has dropped to 1.55 per cent. That just proves this Government's commitment to local government.

One has to ask `What does local government have to look forward to?', because every year this Government has been in power there has virtually been a reduction in real terms in local government funding. We have to ask what amount of funding will be provided for local government in the future. I think we need to look no further than at the April economic statement which details the very sorry saga and tale of woe for local government over the next few years. In the Forward Estimates for 1988-90 local government funding has been reduced by $17.9m; in 1990-91 it has been reduced by 18.7m; while for 1991-92 we see a further reduction of $19.3m. This means in total that local government will have a reduction of $55.9m over the next three years, and that does not even take into account the inflation rate. One can see that the outlook for local government is very poor.

I refer to a press release that came from the office of the Minister for Immigration, Local Government and Ethnic Affairs (Senator Robert Ray) in which he announced details of the new funding arrangements for this year. One could be excused for thinking that local government was going to receive extra funds. The first line says, `Local government will receive an extra $18.5m dollars in 1988-89 under the Federal funding arrangements'. Then the Government does what it normally does with local government; it tends to cover up the real story by adding in the benefits that may accrue to some local government areas from the axing of the clawback situations. Further in the press statement Senator Ray says, `This means that local government will be better off by about $47m in 1988-90'. That is not true because the matter of clawback is a separate situation altogether. It has nothing to do with the financial assistance grants. That was put in there only to try to dress up the figures and to make local government think that it was better off.

In 1988-89 local government received $625.5m; in 1989-90 it will receive $671m, as is indicated in the press release. In the same period inflation is tipped to be about 6.9 per cent. If we project those figures, the real figure that local government should receive is $697.5m. As it is, local government will experience a decrease in funding in real terms of 3.8 per cent in this financial year.

When this Bill was debated in the House of Representatives, the Federal Member for Denison, Mr Duncan Colquhoun Kerr, spent some time explaining how local government had never had it better. I just cannot believe how he could say that road expenditure, for instance, had increased by 20 per cent in real terms, and that the Federal general purpose assistance provided by the Hawke Government to local government was 30 per cent higher in real terms than that provided by the Fraser Government. I would have to challenge those statements because I have had quite a long involvement in local government over many years and I believe that his comments really show how far out of touch he is with the true situation.

I would like to refer to a press release that I put out following the press release from the Local Government Office on increased funding. I am pleased to say that without any prompting from my local association, the Secretary of the Municipal Association supported my remarks when he said that the funding had not been increased at all. Therefore, I would suggest that when Mr Kerr comes to the Parliament and makes statements which are obviously incorrect, we can only assume that he is either out of touch or he is really trying to hide the real situation. I believe that Mr Kerr is guilty of both those actions and I do not think he is doing the case of local government in Tasmania any good at all. Personally, I long for the day when my friend and colleague Mr Michael Hodgman, QC, returns to Canberra and is able to provide the people of Tasmania with the type of strong and meaningful representation which was his trademark. The present representation of Mr Kerr, who seems determined to toe Mr Hawke's line, is pretty weak to say the least. I believe that Mr Kerr would have been better off not saying anything about local government funding because all he has done is enable local government to see him for what he really is.

As far as I can see, local government has two choices as a result of these funding cutbacks: it can either reduce its services or pass on its increases to the ratepayers. In view of the huge hikes in interest rates that are affecting home buyers, I believe it would be unfair to pass these rate increases on to the families of Australia. One can only say that these cuts in road funding will mean a decrease in services. It is just another example of the attack by the Hawke Government on the families and home buyers of Australia.

This treatment of local government is nothing new and every time one of the members of the coalition criticises this Government we hear the same sort of thing. I heard Senator Cook say, `What about the referendum?'. Well, what about the referendum?


Senator Cook —We wanted to give recognition to local government in the Constitution.


Senator CALVERT —I just wish that the Minister would give local government the recognition it needs in financial terms rather than just saying things. That is what local government really wants. It wants the sort of ongoing assistance on which it can rely, not the sort of hollow promises that come from that lot on the other side. Financial assistance is something that is meaningful; something one can see. All we have had from the Government are promises which have been welshed on every year. Another important part of local government budgets-and this is tied in with financial assistance grants-is road funding. There again, the coalition when in government had a very easily understood policy. The percentage of fuel excise which it returned for roads was 75.7 per cent. At the moment, under the present Hawke Government, it sits at a miserable 20 per cent.

When the Hawke Government came to power in 1983 its budget for road funding was $1.2 billion. It is exactly the same now. So in real terms it has fallen by 30 per cent. This represents a cut of something like $350m in around five years. This is something that we cannot be very proud of. Petrol bowsers have become the tax collectors for the Federal Government. Local government is on the end of the queue. Out of every 22.4c, 4.95c goes back to the States and out of that local government gets a miserable 1c. With cuts in financial assistance grants and road funding, the outlook for local government is pretty hopeless.

Question Time is about to be called on and, therefore, I wish to conclude my remarks. Before I do, I again wish to bring to the attention of the Senate the situation at the moment in my State of Tasmania. At a recent meeting of the Municipal Association of Tasmania, Tasmania's 46 councils agreed to spend $20,000 promoting public awareness of the deplorable situation of the roads network. This sort of campaign is going on all around Australia. Local government and the automobile associations have had enough of the penny-pinching attitude of this Government to road funding. I would suggest that local government also has had enough of the penny-pinching attitude of this Government towards one of the most important tiers of government in our country.