ALGA talks up tax reform

Today, ALGA will appear before the Tax Review Panel, chaired by Dr Ken Henry AC, to discuss the role of local government in Australia's tax system. The Review Panel has been commissioned by the Australian Government to undertake a comprehensive review of Australia's tax system (excluding the GST) and is due to report its findings by the end of 2009. ALGA lodged a submission to the review last week.

In its submission, ALGA puts the strong view that any comprehensive tax review must not limit itself to examination of revenue raising mechanisms and personal tax transfers, but should also include an examination of current revenue sharing arrangements amongst the three spheres of government. This is essential to address the vertical fiscal imbalance that characterises our federal system and of the commitment by all spheres of government to work towards the goal of a better functioning federalism.

In its case for fairer funding, ALGA highlights eight main themes: the importance of taxation revenue for the provision of essential local government services and infrastructure at the local and regional level; the role local government plays in raising (some of that) taxation revenue within a federalised taxation system; the nature of local government's tax base (rates), having regard to the requirement that a well-designed tax should be fair, efficient, simple, transparent and adequate/sustainable; the constraints and restrictions that impinge upon local government's ability to fully exploit its taxation base (ability to pay, capping, concessions, exemptions and the potential for state crowding out); the alternative forms of own-source revenue raising being utilised by the local government sector (including borrowing) in an effort to achieve sustainability; the financial sustainability of the local government sector; the critical role of intergovernmental grants from the Commonwealth and the states to the sector (both in the form of general purpose funding and specific purpose payments) in order to promote horizontal fiscal equity for all Australians; and the inadequacy of current intergovernmental transfers, especially Commonwealth general purpose funding, in achieving horizontal fiscal equalization.

ALGA's submission follows the release of the Treasury paper Australia's Tax and Tax Transfer Architecture, in August, which marked the first stage of the consultation process. It is expected that the Review Panel will release its own consultation paper by the end of 2008. A copy of the ALGA submission, together with separate work commissioned by ALGA which is drawn on in the submission, is available on the ALGA website at www.alga.asn.au/submissions/.

ALGA President meets Health Minister

ALGA President Cr Paul Bell met with the Minister for Health and Ageing, Nicola Roxon, at Parliament House on Wednesday.

The meeting to discuss the Healthy Spaces and Places initiative was also attended by representatives from the National Heart Foundation (NHF) and the Planning Institute of Australia (PIA). At the meeting, ALGA and the other attendees briefed the Minister on progress to date on the project, including feedback from the consultation workshops, and possible options to implementation and linkages with other government initiatives. Cr Bell said he was delighted with the opportunity to participate in discussions with the Minister. "It was an excellent opportunity to boost awareness of the initiative and possibly to secure funding beyond 2008-09 for this worthy project." Cr Bell also took the opportunity to welcome Minister Roxon's recent announcement of the National Preventative Health Taskforce discussion paper which focuses on reducing obesity, tackling smoking addictions, reducing harmful drinking and closing the health gap between Indigenous and non-Indigenous Australians. Cr Bell also reinforced the health benefits of the Government's proposed local community infrastructure fund and the pressing need to upgrade ovals, bikeways, swimming pools and sporting facilities, particularly in rural and regional areas.

The Healthy Spaces and Places initiative commenced in February 2007 following the National Speakers Series. One of its recommendations was that PIA develop guidelines to help urban planners design for health and wellbeing. The initiative is underpinned by a collaborative partnership between ALGA, PIA and NHF with funding assistance from the Commonwealth Department of Health and Ageing (DoHA). It aims to provide a national planning guide to address the relationship between the health and wellbeing of the Australian community and the built environment.

Planning meeting for Australian Council of Local Government

On Wednesday, ALGA President Cr Paul Bell and the Board met with Local Government Minister Anthony Albanese and Parliamentary Secretary Gary Gray. The meeting discussed arrangements and themes for the upcoming Australian Council of Local Government on 18 November. Details of the program will be released shortly by Minister Albanese's office. All mayors have received invitations to attend and the majority have already accepted. "I encourage all mayors to make it a high priority to attend this meeting," Cr Bell said. "It is a wonderful opportunity for local government to gather together and raise issues of significance to us such as fair funding, fair treatment, formal recognition and, of course, future challenges such as climate change. The fact that the Australian Council of Local Government meeting will be attended by the Prime Minister and the full Cabinet shows just how importantly local government is viewed by the Federal Government."

"Local government is the tier of government that is closest to the community," Minister Albanese said. "That's why Prime Minister Kevin Rudd and I announced the establishment of the ACLG to provide a new nation building partnership between the Commonwealth and local government."

Wednesday's briefing session was also attended by Deputy President of the Local Government Managers Association Neil Hartley, Brisbane Lord Mayor Campbell Newman, Council of Capital City Lord Mayors Chair Adelaide Lord Mayor Michael Harbison and the Executive Director, Kaele Way of the Local Government Women's Association and the National Secretary of the Australian Services Union Paul Slape. The Minister's staff, Prime Minister's staff and Department of Infrastructure were also represented.

From the President

Last week ALGA completed its submission in response to a call from Infrastructure Australia for views about infrastructure investment in Australia.

While the primary focus for Infrastructure Australia is major nationally significant projects, I saw this as an opportunity to once again highlight that investment in community infrastructure is an essential complement to those investments. Local government, as the sphere of government closest to the community, is at the heart of the provision of collaborative infrastructure and is the key to successful local and regional communities.

A national study of local government financial sustainability by PricewaterhouseCoopers, commissioned by ALGA in 2006, found a national backlog of community infrastructure investment in the order of $14.5 billion.

Based on this finding, ALGA has advocated the establishment of a Local Community Infrastructure Renewals program to assist local government bodies to renew or augment existing community infrastructure and assets.

I was interested to see suggestions in the press during the week that the Australian Government is to fast-track funding for small scale infrastructure. It is a matter I am sure will be taken up at the meeting of Mayors of Canberra on 18 November.

In the case of roads, our submission reminds the Federal Government that local government spends more that $2.9 billion per annum on over 680,000 kilometres of local roads, or about 80% of the road system. An estimated 19 % of the kilometres travelled by vehicles over 4.5 tonnes gross vehicle mass and 28% of travel by all commercial vehicles is on local roads. This includes the crucial "first or final" mile that can easily become the weakest link in a logistics chain.

The ALGA submission also highlights local government's support for a new national broadband network that maximises the coverage of broadband as part of a national network and the desirability of government offices as 'anchor tenants' in regional and remote areas.

In my view digital infrastructure is critical to fostering a more productive, modern economy. Reliable, accessible, affordable and suitably advanced telecommunications are essential for all Australians, and should be considered fundamental to the social and economic development of all Australian communities, regardless of geographical location.

I have previously welcomed the Australian Government's commitment to invest $4.7 billion from the Building Australia fund for a National Broadband Network to enable 98 per cent of Australians to access broadband speeds that are up to 40 times faster than those they have currently.

I was pleased to see in the Infrastructure Australia discussion paper acknowledge the importance of the different types of infrastructure being developed in tandem with each other. Local government is strongly of the view that this is vital. Similarly, it is essential to ensure that the local dimension of infrastructure networks is taken into account when assessing prospective national infrastructure investment projects.

For example, the growing trend towards on farm storage of grain requires access to the internet to sell into the market to obtain the best price and a reliable and flexible transport system to meet customer needs. For business to work in this fashion, fast and reliable broadband is required as well as reliable transport infrastructure. A poor quality local road that is unusable during wet weather may mean that contractual obligations to deliver grain shipments cannot be met which is devastating to a primary producer and to local economies.

A failure to invest in the local infrastructure components of the transport network and to coordinate investment between the different types of infrastructure will reduce the ability of Australian businesses to reach their full potential in the modern global economy.

I believe it is critical that the local infrastructure components of nationally significant infrastructure networks be recognised, and that appropriate support for local links is provided as part of the identification and support of major national infrastructure projects or networks.

While I welcome the new focus on investment in nationally significant infrastructure to secure the nation's economic future, it is important to ensure that investment is also directed to the community infrastructure necessary to sustain local and regional communities and underpin community wellbeing.

The ALGA submission to Infrastructure Australia can be found on the ALGA website www.alga.asn.au/submissions/.

Cr Paul Bell AM
ALGA President

Quote of the week

"There is no easy walk to freedom anywhere, and many of us will have to pass through the valley of the shadow of death again and again before we reach the mountaintops of our desires."
Nelson Mandela

International news  

Biologist Gretchen Daily wants to save the planet by convincing governments and big investors there's money to be made - or at least saved - in preserving nature instead of exploiting it.

It's an approach to conservation that is drawing international attention to this unpretentious Stanford biologist who has garnered some of the world's most prestigious scientific honours.

At its most basic, Daily is figuring out how to put a price tag on the natural world. And colleagues say she has done what many scientists have not: connected theory to practice.

In Tanzania, Daily is helping develop programs where the government pays residents to maintain the forests that regulate water supply instead of logging for fast cash - a move that will save the country money by easing health problems from bad water or by paying for a filtration plant.

She is working with Hawaii to create a system similar to Costa Rica's.

There the government pays landowners $US20 ($A23) an acre to protect existing forest, which helps stabilise the climate and strengthen the country's eco-tourism industry.

International investment helps fund it: Under the Kyoto Protocol, European countries have created carbon markets that allow them to offset their carbon emissions by investing in Costa Rican forests.

"We're in the biggest mass extinction since the dinosaurs," she said in her Stanford office, which is covered with photos of her husband and two children.

"People estimate we'll lose half of the Earth's life forms in our lifetime."

Daily co-founded the Stanford-based Natural Capital Project in 2006 and now chairs it.

Under her leadership, a team of scientists has created software called InVEST, which can estimate the worth of, say, a forest full of pollinating insects vital to nearby crop production. In November, it will be distributed free. Financially strapped countries could find the tool crucial, advocates say.

A poor nation might be tempted to let a rich corporation develop land because it doesn't know the dollar value of the natural resources that will be destroyed.

While she has her critics, Daily insists the potential for real large-scale profit and savings exists.

A successful example she highlights is New York's decision a decade ago to invest a relatively small amount in protecting the Catskill/Delaware watershed, which produces clean drinking water for New York City, instead of building a multibillion-dollar artificial filtration plant.(AP)

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