ALGA's policy agenda taken up in 2008-09 Federal Budget

The President of the Australian Local Government Association, Cr Paul Bell, has welcomed the endorsement of many of ALGA's pre-Budget proposals in the Federal Budget 2008-09.

Several Budget initiatives are designed to benefit local communities. These include the establishment of Infrastructure Australia, the allocation of funding for electronic development approvals through the Housing Affordability Fund initiative, funding for a National Broadband Network and the National Broadband Guarantee, plans to tackle the water crisis and the commencement of the grain line review. Cr Bell particularly welcomed the formal commitment in the Budget to consult with local government on the issue of constitutional recognition, through the new Council of Australian Local Governments (COALG).

The Government says it will build Australia into a modern, 21st century nation through the establishment of a Building Australia Fund, which will enhance nation-building, the allocation of an additional $25 million to support the expanded reform agenda of the Council of Australian Governments (which includes ALGA), and the announcement to establish a Regional and Local Community Infrastructure Program from 2009-10.

However, Cr Bell said he will urge the Federal Government not to wait until next year's Budget before finalising details of the Regional and Local Community Infrastructure Program, given the backlog in infrastructure renewals is already estimated to be $14.5 billion. "This is a funding gap that can only grow bigger as each year passes," Cr Bell said. The Federal Government has said it will work closely with the new House of Representatives Standing Committee inquiry into a new regional infrastructure funding program (see story below).

Fairer general funding for local government is another issue which Cr Bell said he would like to see reformed as a matter of urgency. The announcement by the Government on Budget night that it will commence the most comprehensive review of Australia's taxation system since World War II presents a timely opportunity for local government to put forward its strong case on this issue. "As the Budget Papers reveal, Commonwealth revenues have yet again been revised upward, and remain strong into the forward years. It is time that our country's nation-building includes a financial relations system framework that allows local government to share in that economic strength, so that it can keep pace with the costs of providing services and much needed facilities to its community members," Cr Bell said.

In respect of climate change and natural resources, Cr Bell welcomed the environment, climate change and water initiatives in the Budget, including the Caring for our Country initiative, but said he was at a loss to understand why the Federal Government has not extended the Natural Disaster Mitigation Program beyond June 2009. This Program is at the core of the Disaster Mitigation Australia Package, which the Government made a commitment to updating and improving when it was in Opposition.

"Natural Disasters cost Australia well in excess of $1 billion per annum and investment in mitigation measures is extremely cost effective in helping communities to cope," Cr Bell said.

ALGA will be pursuing outstanding issues with the Government in coming weeks.

ALGA ready to work with Govt on local community infrastructure

The President of the Australian Local Government Association, Cr Paul Bell, has applauded the Federal Government's announcement in this week's Budget that a Regional and Local Community Infrastructure Program will be established from 2009-10.

"The Government's announcement is a response to the extensive grass-roots campaign waged by ALGA, State and Territory Associations and councils over the past 18 months which drew attention to the community infrastructure crisis facing Australia," Cr Bell said. "I congratulate councils for their energy and enthusiasm and for submitting well over 1,000 examples of ailing infrastructure onto ALGA's on-line Community Infrastructure Ideas Register which sparked a national debate directly leading to this initiative."

Cr Bell said local government was responsible for more than $12 billion of local community infrastructure, including recreational facilities such as ovals, swimming pools, walking paths and community facilities such as halls, community and senior citizen centres, libraries and kitchens used by organisations such as Meals on Wheels.

"These are critical parts of the social fabric of local communities which are at risk right across the nation," he said. "ALGA looks forward to working closely with the Federal Government on making a community infrastructure program a reality."

Meanwhile the Rudd Government has welcomed the House of Representatives Standing Committee's inquiry into a new regional infrastructure funding program. The Parliament has appointed Independent MP, Tony Windsor to assist the Committee, chaired by Labor MP Catherine King, in its consultations.

The Government says it will work closely with the Committee and with local governments and other regional organisations to improve and better coordinate regional infrastructure and services.

ALGA identified a major gap in local community infrastructure funding through its report from PricewaterhouseCoopers (PwC) in December 2006. One of the major findings of the report on local government financial sustainability was that there was an investment backlog for community infrastructure in the order of $14.5 billion with an annual funding gap of $12 billion. The PwC report recommended the creation of a Local Community Infrastructure Renewals Program funded at $250m per annum for 4 years to help close the investment gap. There is a considerable body of evidence that demonstrate the multiple benefits of quality and well maintained community infrastructure. Benefits include: attraction and retention of key workers; health benefits from facilities such as recreational facilities, walking tracks and multi-purpose pathways that promote physical activity; and educational benefits through the provision of libraries, museums and galleries.

Pictured: Speers Point Library is just one example of a worthy project for funding which may be eligible under the new Regional and Local Community Infrastructure Program. The Lake Macquarie City Council has submitted onto ALGA's Community Infrastructure Ideas Register a proposal for a $100,000 upgrade to improve community areas, internal fitout, and to meet OHS and fire and disability standards. The library was built in 1962 and due to increased community demand, the library is now cramped, poorly lit, and has inadequate storage and amenities.

Transport Funding - 2008-09 Federal Budget

The first Rudd Government Budget locks in the funding increases for the AusLink program announced in the 2007 Budget. This is in line with Labor's promises during the election campaign to maintain AusLink funding, including for the Roads Recovery Program.

The 2008 Budget confirms the Government's commitment to providing $22.3 billion for AusLink 2 over the period 2009-10 to 2013-14. This is good news for local government, as Roads to Recovery will be funded from this source.

The current AusLink legislation ceases on 30 June 2009 and the Government will need to develop new legislation. Local government will be seeking to influence the new legislation to achieving its objective of greater flexibility in the use of the funds by councils.

Local Government also welcomes the funding for the Grain Transport Taskforce in NSW but is disappointed that the Taskforce is restricted to NSW and does not cover all grain growing areas.

The Building Australia Fund, promises a new era in Australia infrastructure investment and is welcomed by local government as a sensible investment of budget surpluses that will stand Australia in good stead in the long term.

Funding for local roads in 2008-09 will total just under $1044 million made up of:

• Roads to Recovery: $355.5 million (this higher figure reflects some carry over of funding from 2007-08);
• Identified local road grants: $576.7 million; and
• AusLink Strategic Regional: $89.6 million.

More information available at: www.alga.asn.au/policy/finance/federalBudgetAnalysis2008/

From the President

The first Rudd Government Budget has been a good one overall for local government. ALGA's '4 Fs' of Fair Funding, Fair Treatment, Formal Recognition and Future Challenges are well reflected in the document.

Of particular interest for local government was the Federal Government's announcement of a Regional and Local Community Infrastructure Program. This marks the culmination of 18 months of lobbying by local government and is a welcome initiative. ALGA will be working closely with the Federal Government with the aim of ensuring that funding for the program is adequate and that it is set up as soon as possible to deal with the urgent backlog of community infrastructure in need of renewal. The Local Community Infrastructure Renewal Fund proposed by ALGA included an allocation to each council. If an alternative model is adopted by the Government, it is critical that a transparent funding process be established whereby councils are able to put forward proposals which will be judged on need and merit. I am hoping that the new House of Representatives Standing Committee inquiry into a regional infrastructure funding program will achieve this aim.

The renewal of the Natural Disaster Mitigation Program for another year is an important step, however following a year marred by bushfires in the southern states and the devastating Queensland floods, local government was looking for more certainty and a longer-term commitment. This is what we will be asking for in the lead-up to the 2009-10 Budget.

Road funding election promises are now locked in and it is reassuring that the Government kept its pledge to local government and more importantly, to the Australian people. We will be watching with interest some of the new proposals to ease urban congestion and the NSW grain lines study, however we are disappointed that this is restricted to NSW, and ALGA will be lobbying for it to be expanded all grain-growing areas.

The Government has also firmly committed to Constitutional Recognition for local government and ALGA will be working directly with the Government, and through the new Council of Australian Local Governments when it meets, to further the process for achieving this goal which is a long-cherished aspiration of local government.

This brings me to my favourite topics of fair funding and fair treatment for local government.

I was heartened by statements in the Budget of the Federal Government's preparedness to tackle inter-governmental financial relations as part of its Tax Review.

The decision of the Federal Government to look at the full tax system - Commonwealth, State and Local - underlines what ALGA has been saying for some time - You cannot treat each sphere in isolation.

The recent study by the Productivity Commission into Local Government's capacity to raise Own Source Revenue ignored the fact that local government taxes and charges are part of a whole of government approach to raising revenue and providing services. While Local Government has been doing its bit to raise revenue, the real problem has been the tax sharing arrangements between local government which is called on by communities to provide an enormous range of services and the Federal Government which raises vastly more revenue than it spends.

The Federal Government's commitment to collaborative Federalism is not only about coordinating program and service delivery but is also about adequate resourcing of those services and programs. We have seen reforms proposed in the areas of Specific Purpose Payments between the Commonwealth and the States and now we need to see reforms to Commonwealth funding for local government.

The general funding support provided to local government by the Federal Government through the Financial Assistance Grants (FAGs) is extremely important and in the Budget the Government has announced that it would provide $1.86 billion in FAGs to local government in 2008-09, plus a further $14.2m supplementary funding for South Australian roads. This funding is welcome and makes a vital contribution to assisting councils to deliver the services and infrastructure required by local communities. Unfortunately however, all councils face significant and increasing costs pressures in this time of economic growth and the relatively low rate of increase in the grants will mean that many councils will slip further behind. It is for this reason that ALGA has called for more equitable tax sharing by reforming the FAGs so that they are maintained at a constant rate of 1% of Commonwealth tax revenue.

Cr Paul Bell AM
ALGA President

Quote of the week

"Life is not measured by the number of breaths we take, but by the moments that take our breath away"
George Carlin

Forthcoming events

For a full listing of forthcoming events, see ALGA's Events calendar.

• 15 - 16 February 2011 Behaviour Change Workshop with Doug McKenzie-Mohr
• 16 - 17 February 2011 Enabling meaningful change through community engagement
• 23 - 24 February 2001 Evolving Models of Governance and Accountability
• 25 February 2011 Future housing for older Australians
• 02 - 04 March 2011 Census | beyond the count
• 06 - 09 March 2011 PIA National Congress
• 09 - 11 March 2011 LGSA Tourism Conference 2011
• 21 - 23 March 2011 Industrial & commercial Waste Recycling 2011
• 28 - 29 March 2011 Traffic Theory workshop
• 30 - 31 March 2011 3rd Annual Water Leaders Congress