CRAIG COMMENTS

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Local issues
Wednesday 10 October 2007

Local government may yet become a significant issue in the in the forthcoming Commonwealth election. The retiring Premier of Queensland has stated that some rural shires in that State are, or are becoming, unviable and wants to carry out significant amalgamations. This is a minefield he has left for his successor to negotiate.

These are basically the same reasons used by the Kennett Coalition government in Victoria over a decade ago when they implemented one of their most contentious and arguably damaging policies. However, now that a Labor Premier wants to do the same, the Prime Minister has threatened to intervene and has even signalled that, if he is returned to government, he will deal more directly with local municipalities. This threat should ring alarm bells in country seats held strongly by the Coalition.

The Commonwealth Parliament has been funding local government directly since 1975. The Commonwealth Act states specifically that its purpose is to enable all municipalities to operate at not less than average. It is strange that an objective that is statistically impossible to achieve was ever written into an Act of Parliament but it is inexcusable that the current government refuses to correct an obvious conflict within the wording of the Act.

Six years ago, I pointed out to the then Leader of the Nationals, Hon. J. Anderson, that this purpose was nullified by an amendment that requires that 30% of the amount distributed should be on a per capita basis. This ignores the reality that it costs more per capita to provide services of all kinds to widely scattered communities, the emphasis should therefore favour municipalities with a large area to administer. Replying on behalf of the Minister, ex-Senator Campbell stated that in 2001 the Grants Commission had pointed out a 'conflict' in the Act, but the government did not intend to change it.

The Commonwealth Treasurer has instructed the productivity Commission to investigate sources of finance available to Local Government. Only 60 submissions were made from the whole of Australia, which reflects the limited advertising of the inquiry. Most of these are from municipalities or bodies representing municipalities and reflect their perspective. The views of ratepayers are virtually missing from the submissions.

However, the fact that the Treasurer initiated the inquiry makes it clear that he is aware there is something wrong. As Treasurer, he was involved in the introduction of the G.S.T. as part of a "fairer tax system". It seems reasonable to question why he does not appear to be aware of the plight of rural municipalities that have to administer very large areas.

At the recent state election, the Liberal and National parties campaigned strongly on the issue of local road funding (a federal and local government responsibility) conveniently forgetting that their federal colleagues were in charge of the cheque book.

I hope that the issue of the lack of funding for local roads and local government generally is addressed in this year’s federal election and the Nationals and Liberals address the massive funding shortfall for rural council elections.