With the vote in the Senate condemning the Federal Government's proposal to transfer responsibility for Local Government funding to the States and Northern Territory Government, and more recently Senator Harradine showing his hand, the fate of the Tax package is very much up in the air.

The release of the Howard Government's first Budget in this, its second term, could well be described as 'the Budget you are having when you are not having a Budget'. Most commentators agree the real Budget will be brought down when, and now if, the Tax Package is passed.

The Australian Local Government Association (ALGA) has labelled the 1999-2000 Budget as 'uninspiring for local Communities' and 'starting the process of isolating the Federal Government from local Communities'. ALGA President, Councillor John Campbell, has described the Budget as a missed opportunity. He said it should have set the scene for a new approach to supporting local communities as the new century starts.

All of this looks fairly ominous for the future of Local Government. However ALGA is confident the Senate will not turn its back on Local Government, rather it will continue to recognise that Councils have a major role to play in the wellbeing of Australia's communities.

In spite of the euphoria of Treasurer, Peter Costello, over the $5 billion surplus, a better than expected growth rate 4.25%, low inflation and interest rates, the fact is communities are still hurting. This buoyant economy is not translating across the board, rather many people are missing out. Within communities there are winners and the losers, and this is also the case from region to region.

Local Government has been relentless in sending this message to Canberra, and certainly various initiatives announced in the recent Budget in regard to low income families and rural and regional concerns are a step in the right direction. However, the fact that some of these are tied to the further sell off of Telstra and the successful passage of the Tax Package through Parliament has not gelled well with many people, not the least being the crucial vote of Senator Brian Harradine.

With the Howard Government placing all its eggs in the GST Tax Reform basket, and its hard line approach of all or nothing, the fact that we must accept this reform package as it stands without further input or refinement, leaves much to be desired.

The argument that the Government has a mandate from the last election is based on people having a few weeks to consider an outline of the proposals in the heat of a Federal election campaign. Perhaps this is why the Australian Democrats won a number of additional Senate seats, as a check and balance, with voters seeing the Senate in its correct role, as a House of Review. As the Senate elected last October will not begin its term until July this year, the onus lies with our current Senators to provide this check and balance.

ALGA is hopeful these Senators will continue to support its contention that, 'Australians live and work in communities - the building blocks of our nation. The Federal Government must show that its policies are relevant to the real needs of communities. Local Government is the government of communities. Councils spend over $10 billion a year on infrastructure, economic and human services, and employ more than 140,000 Australians. The ability of local Councils to provide adequate services to local communities is, in significant part, impacted by Federal Government policies'.

ALGA and the Senate are correct in their view that the ongoing wellbeing of our communities is dependent upon the important partnership between the Commonwealth Government and Local Government. This partnership, built up over the past 25 years, must be a non negotiable item.