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Local govt loses out again: GST anniversary no party for local government.

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Senator Kim Carr

Labor Senator for Victoria Shadow Minister for Housing; Urban Development; Local Government and Territories 01 July 2005

Local govt loses out again GST anniversary no party for local government

The champagne corks are not popping in local government, five years on from the introduction of the Howard Government's GST. Far form providing increased prosperity for all as promised by the Howard Government, for local government the opposite has been the case.

When GST arrangements were finalised, the Commonwealth agreed to maintain its responsibility for funding local government through financial assistance grants, rather than via GST revenue. But regardless of the nature of the deal the reality is local government and communities are losing out, again.

According to the Australian Local Government Association the value of Commonwealth's core funding for local government (Financial Assistance Grants) will decline as a proportion of total Commonwealth taxation revenue, down from 0.97% in 1996-97 to just 0.77% by 2007-08 based on current budget figures.

A 2004 Access Economics report Commonwealth State Funding of Local Government: An Assessment of reform Proposals says local government’s share of the national tax take has clearly declined over the past 30 years - reduced from just over 6.0% to 4.28% between 1970-71 and 2003-04.

The Commonwealth Government has failed to fulfil its responsibility for leadership, a role it set itself when the GST was introduced.

As the third tier of government local government plays an essential part in building infrastructure for our regions. Local government plays a critical role in maintaining the fabric of local communities. To do its job properly it must be

adequately resourced, and the Commonwealth must play a leading role.

The Commonwealth Government's belated response to the House of Representatives report, Rates and Taxes: a Fair Share for Responsible and Local Government, shows they are simply not interested in improving the financial sustainability of local government.

After 9 long years of Howard Government local government continues to be neglected.

Once again we see the arrogant Howard Government ignoring the needs and aspirations of ordinary Australians, through its careless treatment of local government and communities.

Further information: Kim Carr 0419 563 922, Catriona Jackson, 0417 142 238.