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Thursday, 17 May 1973
Page: 2302

Mr WHITLAM (Werriwa) (Prime Minister and Minister for Foreign Affairs) - I move:

That the Bill be now read a second lime.

This Bill is designed to place local government firmly within the framework of the federal system. The Government is determined to make the third tier of government a genuine partner in the system and to give local government adequate access to the nation's finances. The Bill provides legislative authority for the Commonwealth Grants Commission to inquire into and report upon applications by local governing authorities for financial assistance from the Australian Government. It continues the Grants Commission's role in respect of applications by States for special financial assistance. We propose that the Grants Commission should now play the same role in reducing inequalities between regions as it has between the States since 1933.

The role of the Grants Commission has been confined hitherto to State activities covering one-third of the Australian population.

This Bill will extend the role of the Commission to the larger States and the larger cities of Australia. The legislation implements a firm undertaking I gave on behalf of the Australian Labor Party at the elections. The Government firmly espouses the need for the national Government to supplement local government finances to enable those authorities to perform their increasingly important and wide-ranging functions. It will be noted that the Bill provides for the repeal of the Commonwealth Grants Commission Act 1933, as amended, and for a new Act, to be known as the Grants Commission Act 1973, to replace it.

This new Act makes provision for the continuation of the Grants Commission's role in respect of applications by States for special grants. The automatic right of claimant States to have their applications referred to the Commission for inquiry and report is in no way diminished. The opportunity has been taken, however, to make minor alterations to the precise terms used in the Bill to make them consistent with the practice which has prevailed since the very beginnings of the Grants Commission's activities in 1933. Clause 16 (a) of the Bill, read in conjunction with clause 5, makes it quite clear that the applications by States for grants that will be considered by the Grants Commission are those in respect of section 96 grants for special assistance, for the purpose of making it possible for the State, by reasonable effort, to function at a standard not appreciably below the standards of other States'. This is, of course, the way in which the States have exercised their rights under the existing legislation.

Of the many kinds of applications made by the States for assistance, only one has been inquired into and reported upon by the Commission - -namely, applications by claimant States for special grants. The provisions in the present Act for the Commission to inquire into and report upon any matters relating to a section 96 grant which has been made to a State and upon matters relating to the making of a section 96 grant to a State are retained. In each case the inquiries will be undertaken only if the matters are referred to the Commission by the responsible Minister. All reports of the Commission, including those on applications by any of the States for special financial assistance, under the new legislation will be made to the responsible Minister. Previously the Government was required to have the Governor-General refer matters to the Commission for inquiry and the Commission's reports, as a consequence, were required to be made to the Governor-General.

The main provisions in relation to applications by local governing bodies for financial assistance are contained in clauses 6, 17 and 18 and, in essential detail, are similar to those in relation to State applications for special financial assistance, with 2 important qualifications. First, all such applications must be lodged with the Special Minister of State who may, in his discretion, refer them to the Commission for inquiry and report. I should mention here that the exercise of this discretion is intended to ensure that on y those applications that conform with the requirements of the legislation are referred to the Commission. The Act will require a regional organisation making an application to the Minister to send a copy of its application to the appropriate Minister in the State Government so that the Minister may be aware of the details of the application and be in a position to make submissions to the Commission on any matter related to the application. Further, the Commission will be required to consider submissions made to it by State ministers, the Treasurer and the Minister for Urban and Regional Development on any matters reating to applications by regional organisations for financial assistance but this will not preclude the Commission from pursuing its inquiries in any way it sees fit.

The second qualification is that applications will be considered only from local governing organisations or bodies approved by the Minister for Urban and Regional Development as an approved regional organisation for the purposes of this Act. There are nearly 900 local governing authorities in the 6 States and clearly the limitation of the right of application to the Commission to regional groupings is the practical way of making the prospective task of the Commission manageable. The grouping of authorities into regions and the approval of regional organisations will be carried out in full consultation with the States. To provide a degree of flexibility, provision has been made for the Minister, in special circumstances, to approve a single local governing body as a regional organisation for the purposes of the Act.

It should be clearly understood that the financial assistance to local governing bodies which will flow from the Commission's recommendations will in no way be a substitute for the revenues normally raised by them by long established methods such as rates and charges for services, nor will it replace assistance normally provided by State governments to local governing bodies in one way or another. Rather, it will be in the nature of a topping-up' process of the financial resources of lesser endowed bodies to enable them, by reasonable revenue raising efforts on their part, to provide a standard of services to their communities that will be comparable with that enjoyed by communities elsewhere. I should perhaps emphasise that:

Firstly, such assistance as is granted will be in the form of section 96 grants paid to the States in the first instance; secondly, applications for assistance with single purpose or specific developmental projects will not be the concern of the Grants Commission, and thirdly, applications will not be accepted, from semi-government authorities and business undertakings operated by local governing bodies.

I turn now to what might be termed the machinery provisions of the Bill. The additional task that the Commission will be required to undertake under this legislation is one of considerable magnitude and importance. The present Commission consisting of a part-time Chairman and 2 part-time Members could not be expected to cope with both State and local government applications for financial assistance. The Bill, therefore, provides for a full-time Chairman and from 4 to 6 Members appointed on either a full-time or part-time basis. It is envisaged that the Chairman and 2 part-time Members would continue the task of inquiring into and reporting upon State applications and up to 4 full-time Members, under the aegis of the Chairman, would undertake the task of inquiring into and reporting upon applications from approved regional organisations of local governing bodies. Clause 26 of the Bill provides for the continuity of appointments to the Commission made under the repealed Acts and of the inquiries into State applications for special financial assistance referred to the Commission tinder those Acts.

It is appropriate to mention here that the Government is indeed fortunate that the present Chairman of the Grants Commission, Sir

Leslie Melville, has agreed to continue as a full time Chairman for the remainder of his present term of office which expires at the end of September next year. Sir Leslie is one of Australia's most distinguished economists and has served on the Commission since 1965. His great experience in this area will be invaluable in the formative period of the proposed enlarged activity of the Commission. For the additional members, the Government will be looking to persons with wide knowledge of local government administrative and accounting practices to assist in the important task ahead.

Clauses 8 to 13 of the Bill contain the usual provisions governing the appointment of members of Commissions, including acting members, and the terms under which they hold appointment. It provides for terms of appointment of from one to 5 years as it may not be possible in some instances to obtain the services of an otherwise eminently suitable person to serve on the Commission for a full term of 5 years. Clause 14 provides for the conduct of meetings of the full Commission and Clause 15 sets out the duties of the Chairman in the conduct of the Commission's business.

Clause 19 enables the Chairman to create divisions within the Commission, which will exercise the powers of the Commission for the purpose of conducting inquiries and reporting on applications from States and local governing regional organisations. This is required because it will be necessary for a number of inquiries to be conducted concurrently if the Commission is to accomplish its tasks by the required time each year. Clauses 20 to 24 provide for the conduct of inquiries, the taking of evidence by and the giving of evidence to the Commission. Clause 27 provides for the making of regulations, not inconsistent with the Act, should this prove necessary.

The Commission will be required to report to the Minister on the outcome of all its inquiries into applications referred to it, whether these be applications by States or by local governing bodies. Clause 25 requires the Minister to table these reports in each House before a proposed law relating to the subject of the report is introduced into Parliament. The Minister may, if he chooses to do so, attach to such reports any comment that he thinks proper. This continues a similar provision under the previous legislation and I am sure that members who have studied the Commission's past reports will agree that they are most useful documents for any person with an interest in the financial relations between the various levels of government in Australia. I am equally sure that anyone who has the interests of the 3 levels of government in the Federation at heart will look forward with very great interest to the Grants Commission's Reports on its inquiries into the financial needs of local governing bodies.

The Bill represents an historic step forward in advancing and enhancing the role of local government in Australia. It is a key part of our new charter for local government. I commend it to the House.

Debate (on motion by Mr N. H. Bowen) adjourned.

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