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Labor offers nothing new for Local Government

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M e d i a

R e l e a s eTHE HON ALEX SOMLYAY MR Minister for Regional Development, Territories and Local Government


The Federal Minister for Local Government, Alex Somlyay, said Labor’s promises on local government offer nothing new for councils.

“They promise to continue to continue a number of existing Coalition programmes, recycle some already discredited promises from previous policy launches and rehash their lies about the impact of the Coalition’s Tax Plan on local government."

“It is no wonder Labor’s promises have received a reception from the Australian Local Government Association, that can be described as luke-warm at best.”

Labor has promised to continue three programmes already being delivered by the Coalition:

• Annual financial assistance payments to local councils (see separate release titled $1.2 billion short-fall in Labor’s local government promises for a description of a major error in Labor’s costings for this promise);

• Special purpose funding to delivery programmes with a national significance (such as aged care and community health initiatives); and

• The Local Government Development Programme.

Labor also refers to its discredited Industry Statement as offering benefits to local government. This is the statement that has been described as a grab bag of measures that provides no coherent vision for Australian industry, jobs or exports. The Australian Business Chamber has

remarked that Labor’s promises for industry ignore the single biggest issue facing Australian businesses - the need for taxation reform.

“Labor cannot match the Coalition’s Tax Plan and so they continually resort to telling lies about its impact. Labor’s local government statement is full of such lies,” Mr Somlyay said.

Labor lies when it says the Coalition will ‘abolish financial assistance grants to local government’

The truth is that the Coalition will guarantee the continuation of general purpose financial assistance grants to local government.

It will be an unshakeable condition of State access to GST revenues that financial assistance payments be continued with the maintenance, in full, of all current conditions.

Labor lies when it says that ‘ratepayers will face a steep rise in fees for local government sen/ices with the imposition of a GST.’

The truth is that most council charges will be GST-free. This means that ratepayers will not have to pay the GST:

on council rates; on water and sewerage charges; on compulsory rubbish collection charges; on regulatory charges and on council fines and penalties.

Labor lies when it says that ‘councils will pay a GST on all goods and services they purchase and that cost will be passed on to ratepayers’

The truth is that councils will be able to claim a full refund of all of the GST they pay on all of their inputs - that is, on the goods and services they buy and use to provide services to their communities. In addition, most council services will be GST-free, so ratepayers will not pay the GST.

Labor lies when they say that the ‘administration costs of local councils will increase.’

The truth is that the running costs of councils will be substantially reduced under the Coalition’s Tax Plan.

• Embedded wholesale sales tax will be abolished - saving councils $70 million per year;

• Councils will be able to claim a full refund of all GST paid on business inputs; and

• Councils will be able to take advantage of the new fuel tax and excise arrangements.

Some councils have calculated that these measures will save them in the order of $600 000 per year. Savings of this magnitude will enable councils to reduce debt, improve services and reduce rates and charges.

Labor’s lies on tax have been recognised by the Australian Local Government Association which says that ‘the current Federal Minister, Alex Somlyay, has a point when he highlights the errors in Labor’s analysis of this issue.'

“Labor can’t trusted with the facts on local government policy issues. Labor can’t be trusted to deliver. Labor can’t be trusted with government,” Mr Somlyay said.

ENDS 11 September 1998

C ontact: Graeme Hallett, Media Adviser 0419 218 469