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Government funding not just flat lining – it’s leaving Local Government behind

In his address to the 11th National General Assembly, then President of the Australian Local Government Association (ALGA) , Councillor Mike Montgomery said the biggest issue for Local Government at the national level is the reform of Federal/Local Government financial relations.

“The case for reform is clear,” he said. “When you take into account the dramatic increase in community demand for human services, cost shifting by State and Federal Governments and the escalating costs of providing services, Federal funding is not only flat lining, its leaving us further and further behind. Added to this State and Territory Governments now take twice as much in property taxes than Local Government does.”

He said Local Government’s diminishing share of national taxation revenue is reflected in less than three per cent of taxation revenue being collected by Councils.

“Local Government, as with the other two spheres of government, needs access to growth revenue – revenue that grows with the economy – revenue that provides a stable and sustainable basis to meet the service and infrastructure obligations of 21st century communities,” Councillor Montgomery said. “The Fair Share Report tabled in Parliament during last year’s General Assembly makes it clear that Local Government is short changed and needs a better deal.”

He said last February, State and Federal Local Government Ministers resolved to hold a roundtable meeting with Local Government leaders to progress this Report’srecommendations.The roundtable in June came to an historic consensus on the way forward – to develop a high level intergovernmental agreement between the three spheres of government.

“Since then, the Federal Election has produced two Local Government policy statements with two clear commitments to the reform process,” Mike Montgomery said. “Bipartisan support has continued for implementing the core recommendations of the Fair Share Report.

“The Australian Government’s policy is now clear. Its policy released last month commits the Government to pursuing an intergovernmental agreement to bring a more ordered and transparent approach to coordinating the responsibilities of Australian, State and Local Government functions.

“There can be no doubt that there is a strong will on the part of both the Howard Government and the Opposition to see this through. I’m delighted that the new Minister, Jim Lloyd, shares the same determination to see the key elements of the Report put into place.

“The next question is will the States come to the party? The news here is also good. All States are committed to implementing an intergovernmental agreement (IGA) on cost shifting. An IGA should dramatically reduce the incidence of cost shifting, saving Local Government many millions of dollars each year. For the average Australian, it should mean better coordination across the three spheres of government meaning less duplication and triplication and more effective use of the taxpayers’ hard earned dollar.”

Councillor Montgomery believes a fair share of national taxation revenue can be achieved over the coming three to five years. “But we will need to build on the goodwill that exists in Federal Parliament to make it happen,” he said.

“That means running a strong, grassroots campaign to keep the case before the backbench. As with our Roads to Recovery campaign, we need to turn the backbench into our greatest champions.

“Local Government has done well over the past few years. We’ve secured better funding for our roads. We’ve gained valuable commitments during the recent Federal election campaign.

“Our standing with both the major parties has never been higher. And we are now on the cusp of a new IGA that could and should improve the standing of Local Government within the Australian Federation for decades to come.

“It is now up to us to seize the moment and make this change a reality.”

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