1999 - a watershed for Local Government?

This year will undoubtedly be vital for Local Government across Australia. Not only is it the final countdown to 1 January 2000, with Councils and their communities working to minimise any adverse impact from the so called 'millennium bug', it will also be the year that makes or breaks the Howard Government's proposed tax reforms.

According to Councillor John Campbell, President of the Australian Local Government Association (ALGA), Local Government has come out of 1998 fairly well compared to the worst case scenario where rates, garbage, water and sewerage charges could have been subject to the proposed Goods and Services Tax (GST). However, he points to the fact that there is much doubt concerning a range of other Council activities and whether they will be taxed.

"Many Councils charge minimal fees for the hire of halls or entry to other facilities, as these are already subsidised by ratepayers," he said. "If these fees and charges are subject to a GST, this will have a significant impact on local communities. Across Australia, millions of dollars from users of Council services may attract a GST."

ALGA will make submissions to the Senate Committees and will be advising all MPs, particularly Senators, on the impact a GST will have on Councils and their communities. Not only will Councils become tax collectors for the Federal Government but a GST will take additional revenue from local communities.

Under the reform proposals, Local Government will then be reliant on their respective State or Territory Government handing back their fair share. John Campbell said that the ALGA was totally dissatisfied with the results of the Premiers Conference held without Local Government representation late last year.

"Local Government will become supplicant to the States," he said. "Already having constitutional control, they now want financial control as well. Where does this leave us as far as our rights as a sphere of government?"

ALGA believes that, as a sphere of government, Local Government should get a proportion of the GST collected as is the case for the States. Only Queensland put forward this proposition at the Premiers Conference. With Local Government funding frozen at an historically low level, Councils have only a verbal agreement that the States will adhere to the current formula of funding being tied to growth in the CPI in real terms.

"We will be dependent on the goodwill of the State Government, but sometimes there is no goodwill at all," Councillor Campbell said. "ALGA will push for support in the Senate to defeat this section of the Bill."