Australia's National Local Government Newspaper Online

$2.7 billion surplus yet communities still losing out

Achieving the Budget surplus has come at a cost, not the least for Councils and the communities they serve. According to Councillor John Campbell, President of the Australian Local Government Association, the failure of the 1998 Budget to reverse last year's cuts to Local Government funding will mean ongoing reductions in services to local communities.

He said that while ALGA welcomed this year's return to real term adjustments in grant funding, the fact remains that the 1997 Budget has permanently cut the funding base for Local Government by $15 million per year.

"The 1997 cut has not been restored, so Local Government has now lost $30 million over two years," he said. "The increase in Local Government grants announced in the Budget should have been $39 million not $24 million."

In the lead up to this year's Budget, ALGA circulated a Budget strategy statement, titled 'Supporting Communities', and lobbied Federal Ministers on key issues for Local Government and local communities. With the predicted surplus, ALGA had advocated the need for a more 'community friendly' Budget.

"To maintain the quality of community life in Australia, it is vitally important that the needs of local communities are properly addressed, and that Local Government is given greater support to meet those needs," Councillor Campbell said.

Before the Budget, ALGA announced that it would measure the Budget's impact on local communities against the following four benchmarks.

• Restoration of Local Government grants and reduced 'unfunded mandates'.
• A meaningful Regional Development initiative.
• More emphasis on the needs of local communities.
• Clear signals that taxation reform will not be financed by further cuts to government expenditure.

"While the 1998 Budget heralded some, albeit small, progress towards some of these benchmarks, it does not measure up as a friendly budget for Local Government and local communities," John Campbell said.

With many commentators viewing the Budget as merely 'setting things up' for the Federal Government's impending taxation package, and asserting that this package will be the 'real' budget, ALGA is working to ensure that any change to the tax system will not impact adversely on local communities.

A recent KPMG report, commissioned by ALGA, showed a potential cost of $1.17 billion for ratepayers if rates and Local Government services are subject to a GST.

"Tax reform must not be based on further cuts to government expenditure for vital community services," John Campbell said. "Income tax cuts cannot be a 'give with one hand - take with the other' situation paid for by increased Council rates or reduced local services."

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