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General Assembly, Australian Local Government Association, 29 November 1999: address.

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Senator the Hon Ian Macdonald 

Minister for Regional Services, Territories and Local Government


29 November 1999 








Well thanks very much John Campbell, the President of the Australian Local Government Association, and to you and members of your Executive and perhaps I should at this stage John thank you and your Executive for your cooperation and the good working relationship that we have had over the years.

But I also acknowledge, Presidents of the State and Territory and New Zealand Local Government Associations, the visiting Chinese delegation, Mayors, Shire Presidents, Councillors, Aldermen, other distinguished guests, and Ladies and Gentlemen.

Thank you very much for the opportunity to address you and to officially open your National General Assembly. On behalf of the Federal Government, and in one of my other roles as Territories Minister I do welcome you to Canberra - our Nation’s capital and I emphasise that it is your National capital. I hope that you can make the most of your time in Canberra, both during the work area and also in the odd hour or two you may able gather away from this particular Assembly.

I want to invite you all up to Parliament House, as John has said the House of Representatives is not sitting this week, but the Senate is for a couple of days and then we go into Estimates, and of course the Senate is where all the action happens in the Federal Parliament these days.

Ladies and gentlemen, this year’s Assembly marks the closing of the Millennium and throughout the next three days, you will be reflecting on the past and looking towards the future, and I wish you all very well in the important deliberations you will take part in.

It has been just over 12 months since I last addressed your General Assembly and there has been much that has happened in that time. Last year I spoke to you at length about the Federal Governments moves to overhaul our antiquated and restrictive taxation system and I just want to briefly update you on that later.

But I thought I might start by referring to the most recent vote in which we were all involved just three or four weeks ago - and that highlights the real challenge for Local Government. For those of you who passionately seek Constitutional recognition for Local Government the failure to pass the two referendum questions demonstrates just how difficult it is to have Constitutional change occur.

On two previous occasions when a question concerning Local Government was put at a referendum, the electors opposed it. For those amongst you who want Constitutional recognition you have to plan a long campaign, but initially your goal should be State and Territory Governments. If anyone of those State or Territory governments is not on your side, any further proposals will end up as before and like the last two referendum questions, so its a long campaign and that is where you have got to start.

Our Tax Reform Package, which is now followed with reforms in the business tax system, will create a much fairer taxation system for all Australians. Those changes will create many benefits for Australia including Local Government. The benefits include for Local Government the removal of embedded taxes and reduced fuel costs.

A Victorian Government assessment done by Arthur Anderson Accountants showed that annual savings ranging from some $300,000 for a small rural shire to some almost $2 million for a inner metropolitan council could be anticipated from Tax Reform.

There will of course be implementation costs, and I know you are coping with that at this very moment. But these implementation costs will be substantially less than the savings that councils will be able to achieve from the New Tax System. To further assist councils with meeting possible implementation costs I have given over $2.5 million to your State Associations to provide on the ground training and assistance. The Australian Taxation Office is providing further assistance and an industry specific booklet on GST implications for Local Government is expected to be released before Christmas.

And I want to emphasise this, because I was shocked, just last week to find that there are still many Councillors who don’t understand this. Councils will not pay the GST - well you will pay it, but you will get it back fully and immediately. About 90 to 9 5 percent of the services that you provide to your customers, that is ratepayers, will be GST free to them as well. So the impact on Local Government and on the ratepayer will be quite small.

For that small percentage of the services on which your customers will pay a GST, clarification is soon at hand with the finalisation of a list of Local Government activities that are to be exempted from the GST under a Division 81 determination. We have been discussing this with your State Associations and with the ALGA and I will be continuing those consultations and we hope to have a final list out, very soon so that you can get going and fix your systems up.

And on the tax front as well ladies and gentlemen can I announce some good news for regional Councils and many of you have been raising this over the last decade or so and that is that last Thursday the Federal Government confirmed the exemption from Fringe Benefits Tax of housing provided by employers in remote areas. So there is now an exemption in place for Councils that need to supply housing to attract employees to remote parts of Australia.

As part of our tax reform plan our original proposal was to pass responsibility for Financial Assistance Grants to Councils over to the States who would have been in the position to provide additional funding for Local Government out of their increasing revenue base from the GST.

But because, as Bismark once said, "politics is the art of the possible", we had to compromise our original package to get it through the Senate. GST off food meant a reduced take by the States who of course receive all the GST revenue. So to compensate the States, the Commonwealth took back responsibility for funding the core element of Financial Assistance Grants that is some $1.265 billion in real terms which we contribute every year. But I emphasise to you that the States with all of the GST revenue will have an increased and increasing revenue stream. And I urge you all to approach your respective State Governments for a share of that stream.

And whilst on the subject of Financial Assistance Grants can I let you know that I will be shortly discussing with the ALGA and the State Local Government Associations the terms of reference for a review of the Local Government (Financial Assistance) Act 1996 . The current Act requires this to happen prior to July 2001. But because of some problems with the administration of the Grants in some of the States I am bringing this forward.

But I do need your input. Please consider the terms of reference when they are announced and let me know your Councils views. Any change of course will effect all of us, but I believe that fine-tuning is needed to get better outcomes for the majority of Councils and the people they serve.

I know one of the solutions that many of you will have for Financial Assistance Grants is simple - and that is "put more Federal money into it". But as I often say - and you as Governments yourself will understand - Governments don’t have any money - we only use other peoples money, namely taxpayers. And the payers, be they tax or ratepayers, strangely enough have an aversion to paying more.

For governments to spend more they have to either cut services elsewhere, they have to increase taxes or they have to borrow. And you all recall the decade prior to 1996 when unsustainable spending and borrowing by the Federal Government led to interest rates on small business of some 18, 19 even in cases up to 25 and 26%.

And for councils, 10 years ago the NSW Treasury Corporation 5 year rate, which is the one apparently used by Councils in NSW was 14.73 per cent. That same rate today is 6.24 per cent.

Councils should not overlook the impact of this good financial management of the Australian economy on their own budgets. Just last week I had a Council come to see me with some real problems with roads in a rapidly developing area, they were seeking some more funds. That council currently gets around $1.8 million in general purpose FAGs. But it has a debt of $15 million and the fall of interest rates by some 8% over the last decade means that in effect that Council has achieved almost a doubling of its outsourced assistance because of the savings in its interest rate bill occasioned by the Federal Governments careful management of the economy.

So it is important to reflect on what happens to the wider economy, to small business, and even to Local Governments when Federal Governments spend money they simply do not have.


Regional Summit

Councillors, ladies and gentlemen, in October the Federal Government hosted the Regional Australia Summit which brought together some 230 business, Local Government and community leaders to develop a more cohesive approach to creating a positive futures for regional, rural and remote areas. The Summit achieved a great deal through hard work and innovative suggestions to improve the lot of regional Australians.

Those of us who live in regional Australia know the problems - what we need is realistic and achievable solutions and that was what the Summit was all about. This goal was helped by a case study of just a couple of the many regional communities in Australia that have achieved success by showing leadership and drive at grass roots level to turn their locality around. And I want to particularly congratulate two Councils who featured in that positive push. Delatite Council in Victoria, which was show cased at the Summit, for a youth employment exchange with a community in Colorado in the USA. And Booringa Council in Queensland for its Mitchell Town economic initiatives, both of those Councils featured in the show casing of communities in regional Australia which have done it themselves, have turned their community around by local initiatives.

As well during the Summit the go ahead of the Alice to Darwin railway was announced bringing nation building projects back into vogue in Australia and at the same time creating some 7000 jobs Australia wide. As well the Foundation for Rural and Regional Renewal was launched. This foundation is a philanthropic foundation involving business, governments and communities working in partnership to provide leadership, training and funding for rural and regional Australia.

The outcomes from the Summit were listed in a 6 page communique and that is available on the Net and those recommendations are being considered by a Steering Committee. There is a timeline for completion of the plan for implementation and that is only a matter of weeks away - it is expected by Christmas.

On Friday last, I reported back to the Spencer Gulf community on the Commonwealth’s response to the first Regional Forum which was held in July and which involved, amongst others, many of the Local Governments in the Spencer Gulf region of South Australia.

This Forum and our response are another step in the right direction to closer partnerships and communications between Local, State and Federal governments. It demonstrated that much of the assistance that is available is not being accessed simply because of lack of communication and lack of understanding between the various communities and the bureaucracies of the various spheres of government. Hopefully that trial Forum will be repeated, hopefully that one will be a benchmark for better achievements across regional Australia into the next several decades.

The next of these regional forums is to take place in Armidale in Northern New South Wales and will, if the Spencer Gulf project is any guide, mean real benefits to that area.

Another way in which our Government intends to interact with Regional Australia is via the Northern Australian Forums which I have announced will occur in September next year. It will involve Councils, communities and Governments north of the Tropic of Capricorn. In this way we want to continue the dialogue and achieve real solutions for rural Australia.

12 months ago I told you of our plans to put services back in the bush with our Rural Transaction Centre policy. I am pleased to report 12 months on, that these plans have turned into reality with the opening this month of the first three Rural Transaction Centres and the ribbon cutting for another four hopefully before Christmas. Local Government have played a major role in five out of the first seven Rural Transaction Centres open, and I urge your continued involvement to bring banking and other Federal, State and Local governments services back to smaller communities in regional Australia.


Local Agenda 21

Another issue of importance to all us is the environment. One of the key challenges for our next century is the repair of our countries past environmental damage and to look at our future impact on our countries fragile environment. Local Governments spend more than $3 billion each year on environmental protection and resource management. You also have major involvement in waste management, water, sewerage, flood mitigation, fire prevention and protection of the natural environment. This places Local Government at the forefront of implementing key environmental initiatives, like Local Agenda 21.

Local Agenda 21 is a globally recognised approach to implementing ecologically sustainable development at the local level, through cooperation betwe en governments, industry and community groups.

Already some 75 Councils in Australia have implemented or are developing Local Agenda 21 plans. Many of these Councils are urban councils, like the City of Manningham’s Environmental Management System and the Gold Coast’s Integrated Environment Plan which demonstrate the Council’s commitment to the objectives of Local Agenda 21. These are just two examples that are very encouraging.

I am pleased to announce funding of $100,000 from the Local Government Incentive Programme for Local Agenda 21 activities including promotion, education and training for Local Government, to support and encourage the adoption of Agenda 21 plans in the achievement of long term sustainability. This work will be undertaken in conjunction with the Environmental Resource officers located in each State Local Government Association.


Local Government On-line

One further programme I just want to briefly mention is that from the Federal Governments additional funds injected into the Networking the Nation programme. An allocation of $45 million has been made to support councils in using telecommunications to deliver improved services and benefits to their communities. This provides Local Governments with the opportunity to use advanced telecommunications technologies and networks in delivering services.

This Local Government On-line programme offers great opportunities to improve access to services through telecommunications and I urge you to think of ways you can use this initiative to assist in the delivery of core services to your particular community.


CALP - Commonwealth Assistance for Local Projects

Ladies and gentlemen, there is a wide range of Federal Government programmes from all departments that Local Government can access for support and funding. But I appreciate that sometimes it is difficult for councils and communities across Australia to access appropriate information about these Federal Government initiatives.

We have recently launched two booklets detailing the Federal Governments assistance, one for farming communities and that is called The Rural Book and one for regional communities and that is called Users Guide to Regional Services from the Commonwealth.

Ladies and gentlemen today I am very pleased to be able to launch a companion booklet specifically targeted to Local Government and local communities entitled Commonwealth Assistance for Local Projects . This publication is a useful resource for Councils and local community groups to find sources of funding. It gives the contact details for assistance, including an Index of Internet Sites. Copies of this will be sent to all of your Councils next week. Some copies are available from my Department’s stand in the exhibition area.

Ladies and Gentlemen: I see that you have a very full and interesting programme for your 1999 General Assembly - it is a milestone Assembly to mark the closing of this Millennium. And it is great that you have a record number almost 900 I am told, delegates and a large delegation from China to mark this event. I am delighted to be part of the National General Assembly and to officially declare it open.

For our Nation, the next Century will see us taking an ever increasing role in the Asia Pacific region, with our standing of living soaring, and Australian innovation and spirit providing a lead for the World.

We have the people, we have the natural resources, the political stability, the freedoms that truly do make us the lucky Country.

Local Government has always played a major role in Australia’s success - and I am confident that with its leadership, expertis e and dedication, Local Government will be a significant partner in driving Australia’s progress into the new Millennium.

Councillors, ladies and gentlemen can I in this last Christmas of the 1900’s wish you a very festive and happy and peaceful Christmas period and bright and prosperous New Millennium.





jy  1999-12-02  11:37