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1996 National Assembly of the Australian Local Government Association, Canberra, 2 December 1996: address

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The annual National General Assembly of the Australian Local Government Association is an excellent opportunity for cross fertilising the ideas of elected representatives from either end of the Australian spectrum of government.

The National Assembly is the closest institution we have to a 'parliament' of local government. It draws together elected representatives from every corner of this country from all political persuasions. It is the largest and most representative governmental body in Australia and provides us all with a rare and valuable opportunity to get messages from our grass-roots.

My thanks to Mayor David Plumridge - elected to continue his successful tenure as President of the Association for another year - for the invitation to join you here today.

I also take this opportunity to thank my former colleague and predecessor as Deputy Prime Minister, Brian Howe. Brian really carried the former government's agenda on local government for many years and this is the first ALGA National Assembly from which he has been absent since retiring. Brian was a great champion of local government and worked very hard to improve the standing of the 'third tier' over his many years in Parliament. Many of the significant achievements of the Labor Government regarding regionalisation and local government I will discuss today were Brian's brainchilds. We all owe a debt of gratitude to him.

This year's Assembly theme - New Challenges - New Opportunities - is particularly relevant in the current context of radical change.

The Howard Government has embarked on a program of change to many facets of the public sector which will impact on the operation of local government and, perhaps more significantly, on the relationship between the federal government and local authorities. I hope this National Assembly will work to preserve the local- - federal relationship for the benefit of all Australians.

What must be remembered by all levels of government is that we are employed to work for the overall good of society. All three levels of government must cooperate to provide the best and most efficient services to Australians.

What must also be remembered is the perspective of the ordinary Australian: that all politics is local. Recreational facilities, local streets, child care, education and employment are paramount and many of these services are managed by local government. Paramount amongst these is the creation of employment which must come at the top of the agenda of any Australian government - federal, state or local. All three tiers of government have a responsibility to contribute to the national effort of getting unemployment down.

Maintaining the focus on employment is also important in all levels of the private sector - many large firms are looking at regionalisation and it is useless to try to understand the employment pressures on the small business sector without considering its survival in the context of its local environments. Forums like this one can give the federal Parliament a unique insight into local business environments and help us to understand them.

Local government has been around a lot longer than the federal government - since 1840, when the first local government system was introduced in South Australia more than 60 years before federation. With the centenary of federation looming, an opportunity for reform of the constitutional status of local government is again possible.

The relationship between local government and the Commonwealth has never been stronger than it was in the last years of the former government. I believe the advances that got us to that point need not necessarily be lost because of a change of government in Canberra. However, maintaining and improving this relationship will certainly provide a real challenge to you all. Regardless of the attitude of the present Government, bodies like ALGA have a responsibility to encourage sensible policies from the Commonwealth - policies which will continue the moves towards regionalisation and local decision making.

The Australian Labor Party has long considered local government an institution that is both under-utilised and poorly protected in our national political system. An historic partnership has existed between the Australian Labor Party and local government at the national level which has seen more than 20 years of reform to the role, funding and status of local government.

The Whitlam Government was the first to realise the true potential of local government as a key participant in national affairs and in the delivery of Commonwealth programs. The unsuccessful referendum of 1974 could have seen the Commonwealth introduce borrowing for and direct funding to local government. Despite the referendum setback, the Whitlam Government oversaw the introduction of specific assistance grants and general revenue grants from the Commonwealth to local government authorities.

In 1988, we tried again with a referendum proposal which would give local government the recognition it deserves in the national Constitution rather than existing at the legislative whim of state governments. The Liberal Party, with John Howard as Opposition Leader, successfully waged a scare campaign against the proposal which saw the referendum defeated. But the recognition debate will not go away, as was seen by the prominence of the issue at the 1994 and 1995 ALGA National Assemblies.

The Australian Labor Party still supports the constitutional recognition and independence of local government. The Accord signed between the Commonwealth and local governments at last year's Assembly had Constitutional recognition as one of the Commonwealth's first commitments. I fear this commitment has been delayed with the election of a new government in Canberra. The Minister for Local Government, Warwick Smith, addressing the Institute of Municipal Management in May this year, gave little comfort to supporters of Constitutional recognition. Mr Smith could only say that he 'had no reason to doubt' that the issue would be included in the agenda of the so-called 'Constitutional Convention' that may be held next year. The actual agenda, it seems, is not to be decided by Cabinet or even the Parliament but is in the hands of Senator Nick Minchin, Parliamentary Secretary to the Prime Minister.

Mr Smith went on to say his support for Minchin putting recognition of local government on the agenda of the possible convention should not be read as an indication of support for such a proposal.

He further qualified this by reminding the Institute that the Commonwealth really has no role in discussing the matter as it is a state government responsibility. Obviously, the irony of the fact that the state jurisdiction is exactly the problem that Constitutional recognition of local government is trying to solve was lost on the Minister. Either way, it is obvious there will be no moves towards recognition without the agreement of all six state governments while the Liberals remain in power in Canberra.

The Accord signed between the former Labor federal government and ALGA at the 1995 National Assembly was a major step in formalising the relationship between these two tiers of government. The Accord spelled out the roles for, and expectations of, both levels of government and articulates agreed national priorities for action. It committed both parties to increased efficiency, streamlined regulations, the enactment of more efficient planning and management processes and improved environmental practices. The Accord also put in process a platform of mutual recognition for local and federal governments through the Constitution and established an ongoing process of negotiation and implementation based on mutual respect and agreement on roles and responsibilities.

Importantly, the Accord also put into place a guarantee of real per capita maintenance of untied financial grants on a rolling three year basis. It also massively boosted the financial commitment to the Local Government Development Program to $48 million over four years.

The Accord put in concrete the close relationship between our two tiers of government. At the time David Plumridge said "1995 will be recorded as the year local government came of age in the Australian federal system."

While the Accord was a most significant step, it remains to be seen how much survives. The Government's commitment to the provisions of the Accord is questionable at best. Fears for the worst are reinforced by the Minister's statements, the report of the Commission of Audit, and the August budget.

The Government proposes to replace the Accord, which was agreed on less than a year ago, with a memorandum of understanding which they hope to put in place as part of the proceedings of the National Assembly this week. It is easy to see that some of the major provisions of the Accord will be a bitter pill for the Coalition to swallow, especially those concerning Constitutional recognition of local government, the guarantee for the maintenance of untied funding, and the Local Government Development Program.

The Government will be very reluctant to accept some of these provisions and I sincerely hope delegates from the hundreds of local government authorities represented here today will not accept second-best from this memorandum of understanding.

The great challenge for ALGA and the delegates of the National Assembly is to see that the vital agenda of the Accord in giving local government a legitimate role in the federal system and guaranteeing funding are carried through, regardless of the change of government.

The historic partnership between federal Labor and local government really came to fruition during the Hawke and Keating Labor Governments and will be remembered by many as one of the most significant achievements of this era.

This program was neither traditional centralism nor was it states' rights. It was something new and with enormous potential. Local government was right at the centre of it.

Under the reforms of the previous federal government, local authorities' undeniable status as the rung of government closest to the people was utilised, making them key players in the delivery and targeting of Commonwealth programs and in the national economy.

The Local Government Capital Works program - funded by the Commonwealth and implemented by local government authorities in 1992 - was credited with helping lift the nation from recession and kick starting the economic recovery which continues today. The program was initiated in a time of economic downturn and distributed money to 410 councils for hundreds of projects worth a total of $348 million. Although it was a one-off initiative, the Local Government Capital Works Program provided the basis for the creation of a system where local government played a much greater role in the provision of services funded by the Commonwealth and in providing advice to the Commonwealth on local priorities and strategies.

Problems deriving from the small size of local government areas required a new strategy of regionalisation which utilised adjoining local authorities with linked economic interests. As tariffs and other forms of protection decline, the international economy will consist less of countries competing with other countries - or states competing with states within nations. We will see regions become the natural units of the economy and the basis for competition. The impetus for economic growth and reform will more and more come from the regions themselves with the Commonwealth providing the funding and operational frameworks needed to ensure efficiency and effectiveness on a national level.

Local communities and regionalised government can readily align their objectives. The regional development policies of the former Labor Government took advantage of these natural alliances through a range of initiatives.

The Working Nation White Paper on employment and growth in 1993 brought together the Commonwealth and local authorities for perhaps the greatest ever expansion of intergovernmental relations in the history of Australian public administration. Working Nation put in place the government infrastructure needed for regional economic decision making to be moved from Canberra into the regions themselves where teams of local leaders, with support from the Commonwealth, could identify their own strengths and weaknesses and how to address them.

Working Nation put into place organisations which reported direct to the federal government on local matters. Regional Development Organisations - known as REDOs - and Area Consultative Committees - known as ACCs - comprised local government representatives, employer groups, unions, local business leaders and education and training providers in many regions around the country. REDOs and ACCs were responsible for the local allocation of Commonwealth money and for advising Canberra of local needs and priorities.

These initiatives involved an unprecedented devolution of power from the Commonwealth to regional bodies, largely based around existing alliances between local government authorities. Working Nation was a major turning point for intergovernmental relations in Australia with local government becoming a major player in the national economy. It allowed Canberra to draw back from the role of driving priorities and allowed local leadership to do so within a national policy framework.

Part of the Working Nation commitment was an array of labour market programs aimed at assisting the long term unemployed to gain relevant training and recent work experience. Successful programs included the Landcare and Environment Action Program (LEAP) and New Work Opportunities (NWO) which trained and employed young people on local projects. Local Councils became instrumental as sponsors of LEAP and NWO projects around the country. For the first time in decades, local government authorities were taking an active role in training and helping find jobs for their own unemployed constituents. And they did so with quite some success.

Unfortunately, the Liberal Government has backed away from these successful strategies. ACCs have been 'frozen', REDOs have had their funding cancelled. The budget also cut around $1.8 billion from Working Nation, closing both the LEAP and NWO programs. The Commonwealth has now closed the Office of Regional development saying "there is no clear Constitutional rationale for Commonwealth involvement in regional development". With the Office of Regional Development went a whole raft of programs developed by the former government including the successful Building Better Cities program which had developed regional infrastructure throughout the country.

Prior to the announcement of the closure of the Office of Regional Development, a $700,000 study was commissioned from leading consultancy firm, McKinsey and Co, to advise on the Commonwealth's role in regional development. The report, Supporting Regional Leadership: Unfinished Business, was presented to the Government after the closure of the Office but was not released. My colleague, Simon Crean, obtained a copy of the report which said that in just 18 months the REDOs had made a positive start on rejuvenating regional leadership and had the potential to benefit the regions and through them the nation.

What is clear from the Unfinished Business report was that even independent analysis proves that our regionalisation policies were working well. It is only the Government's ideological opposition to communal action through government programs which is driving their agenda. This is not good news for local government.

The Government's anachronistic adherence to states' rights principles and their inability to see government expenditure as an investment, not just a cost, means the cooperative forums which brought together all three spheres of government will be gradually starved.

We are entering an era of new centralism.

This new centralism is clearly seen in the government's policies for the contraction and privatisation of Telstra. This policy has grave ramifications for regional communities around the country, especially when the millions of dollars of Telstra's community service obligations to regional areas are considered. The unsubsidised cost of connecting a basic telephone service in a regional city can top $1000 - a cost many may have to pay with a privatised Telstra free of its public obligations. Although the Government made a half-hearted effort to protect regional telephone users from their legislation, they let the cat out of the bag by saying the obligations of a privatised Telstra need only be fulfilled where 'efficiently and economically practicable'. It's not hard to imagine how efficient and practical Telstra's community service obligations would be considered by an international telecommunications giant if they were to have an influence in the company.

Telstra also employs thousands of people in regional towns and cities around Australia. For example, one third of the workforce in Roma, Queensland is employed by Telstra. Many of these people will face the sack this year or next in a major blow to regional Australia.

During the years of the former Labor Government, a range of programs was implemented which allowed local government authorities to directly implement Commonwealth programs themselves. Most of these programs resulted in improved allocative efficiency for the clients and better outcomes for the Commonwealth and local government. Councils have become a major provider of high quality community based child care, thanks in part to the operational subsidy paid by the Commonwealth. Home and Community Care services, particularly for the elderly and younger people with disabilities, have been jointly financed by the state and federal governments with local authorities as the primary service providers. Other Labor initiatives like the National Coastal Strategy and Urban Flood Mitigation Program involved local government as an important participant in national policy goals.

As with labour market programs, the August budget left many of these council- - provided and Commonwealth-funded programs in tatters. Home and Community Care clients, or their providing councils, are facing an increase in user fees of well over $6 per hour due to Commonwealth cuts. The community child care operational subsidy has been cut - as has the program for 5500 new places - which will raise weekly fees for parents by up to $25 per week and will force many to opt for lower quality care. Funding for environmental and urban renewal programs has also been slashed. The Howard Government has even cut the Labor program which was to bring the Internet to every public library in Australia, 80 per cent of which are owned and operated by local government. These cuts to indirect assistance to local government will erode council budgets and put further pressures on services.

Direct funding to local government - the funding which was guaranteed under the Accord with the former federal government - has also come under attack by the Howard administration. Thankfully, pressure from state and local governments and the public forced the Government to back down on their threat in May to require all local government authorities to pay sales tax to the Commonwealth with absolutely no recourse for Councils to assess Commonwealth properties for rates. However, the Government was not pressured out of making what Minister Smith referred to as a 'significant curtailing' of the Local Government Development Program or the abolition of the Urban Flood Mitigation Program. The Commission of Audit recommendations are still very much on the Commonwealth agenda, with continuing plans to incorporate financial assistance grants into the Commonwealth's payments to the states in recognition of the states continuing legislative responsibility for local government.

The Australian Labor Party remains committed to local government. We are committed to the Constitutional recognition of this tier of government and we are committed to guaranteeing funding. We are committed to the maintenance of an agreement between the Commonwealth and local governments creating processes for these goals to be met.

Labor is also committed to the processes of regionalisation and the devolving of power from Canberra and into local organisations with the local knowledge and know-how to make Commonwealth programs work for their clients on a local level.

Being in Opposition has given us a chance to review our regional development policies, most of which came into existence over the last term of our Government and had only a short time to display their effectiveness. It is clear that the number of regions, and more importantly, their boundaries, need to be reviewed. This is a process which will involve local Councils and their regional bodies.

Simon Crean, as Shadow Minister for Industry and Regional Development, is also developing policies to rationalise the REDO and ACC concepts - which were proven to be so successful in only 18 months by the McKinsey and Co report - into single regional bodies at this stage called 'super REDOs'. Mark Latham, the Shadow Minister for Local Government, is also looking at how we can build on our Accord commitment to local government in the future by addressing vertical fiscal imbalance and other structural difficulties.

The support and advice of local government authorities - and their peak bodies like ALGA - will be a vital part of the development of these policies as we work towards returning to government in 1999. To assist with this project, I have initiated a Caucus Regional Taskforce which has been charged with establishing a regular dialogue with local government authorities, regional business and community leaders. The Taskforce will meet with people on their home turf, listen to them, and reflect and be an active participant in the regional Australia debate.

I hope that my Taskforce will be able to visit and meet some of the delegates at this National Assembly on their home turf over the next couple of years to hear your feedback on our policies and how we can address the needs of regional development and local government.

The 1996 National Assembly of the Australian Local Government Association promises to be a challenge of a magnitude local government in this country has never faced before. You have made huge advances in your relationship with governments over the last few years and now are faced with the difficult task of protecting those hard-won reforms through a period of great austerity and opposition from above.

The challenge you face is not just about public administration. The key to this challenge is jobs - jobs in your local communities. Labor in government pursued a policy of reducing unemployment, increasing growth and wealth through national programs implemented at a local level.

If you look at each cut proposed by the Howard Government individually, they may not do too much to harm your community. But, taken together, they spell disaster for your constituencies. As these cuts take effect, your position in the community will give you a unique perspective on their impact on local employment. I hope this will provide the incentive you will need for the long fight ahead over the retention of those programs.

Thank you for giving me the opportunity to talk to you today. I look forward to seeing many of you again - and some new faces from local government - at the 1997 National Assembly where we will have another opportunity to identify the new challenges and new opportunities ahead for local government in Australia.