Carbon pricing will affect councils and ratepayers

The Australian Local Government Association (ALGA) has welcomed the Federal Government's willingness to discuss and clarify the effects of carbon pricing on councils and ratepayers.

ALGA President, Genia McCaffery said that the Association supports the concept of a market-based approach to carbon pricing but further market modelling and negotiations are needed before the full impact of the carbon price mechanism can be determined.

"It is clear that waste management will cost more. Waste is covered by the scheme but legacy waste is excluded. Determining how to measure carbon pollution from waste, such as emissions from landfills, is not so clear," Ms McCaffery said.

"We are concerned that there appears to be no standard method for measuring emissions from landfills and estimation methods are unreliable. Also, the costs of waste-related pollution will have to be met by landfill operators including many local councils, which will then ultimately need to be passed on to ratepayers."

ALGA will be working with the Government to attempt to resolve the technical issues surrounding waste-related pollution and provide local councils with a better understanding of their obligations and how best to manage carbon pricing and energy efficiency.

For more on this issue, read ahead to the President's Column.

New Zealand Local Government Minister strongly supports councils at conference

While structural reform and constitutional recognition (and relationships with the other levels of government) are priorities for ALGA and state and territory local government associations, it is evident that these issues are also testing the minds of councils and ministers in New Zealand. More than 500 delegates attended Local Government New Zealand's annual conference in Wellington earlier this week and the highlight for many was the speech by on Tuesday, 11 July by the New Zealand Local Government Minister, the Hon Rodney Hide.

Minister Hide, who was seen as a challenging minister for the local government sector when he took up the appointment three years ago, spoke passionately in support of local government and made a number of welcome points including a strong statement that he could see no mileage in further amalgamation of councils, stating that instead he saw more value in strengthening sharing of service arrangements. The Minister also talked about the challenge of ensuring an appropriate place in the New Zealand Constitution for local government which he noted was properly constituted and democratically elected. Minister Hide said that all too often central government was at fault in dealing with councils without consistency. He stated that central government should sign up to a series of principles to govern the relationship with local government; including:

• clear assessment of what level of government is most competent to make decisions on particular issues;
• a commitment that any decision of central government affecting or constraining local government should only be taken if in the national interest;
• a commitment that if there is a decision to intervene in the national interest then central government should bear the costs; and
• an agreement that the costs of any intervention of central government in local government affairs should be firmly established and should be transparent.

Unfortunately for local government in New Zealand, Minister Hide was recently replaced as the parliamentary leader of the NZ ACT Party and is expected to lose his place in NZ Parliament after the election due in November.

ALGA contributes to Natural Disaster Insurance Review

ALGA has finalised its submission to the Natural Disaster Insurance Review Panel.

In its submission, ALGA argues that while councils generally appear to have adequate insurance arrangements for buildings and other property, they do not as a rule, insure many of their infrastructure assets, in particular local roads and most bridges. It is not common practice for any government (local, state or federal) to insure such assets in Australia. Consequently, this type of insurance is not readily available in the market.

As a result of recent changes to the National Disaster Relief and Recovery Arrangements (NDRRA), which require insurance (or an explanation of why it is not practical), this general lack of insurance availability raises a number of issues for local and state governments. Of main concern is the potential increase in insurance costs that may be faced by individual councils. In addition, local governments could receive reduced funding assistance from the Commonwealth, and in turn from state and territory governments, to assist with challenges following major natural disasters such as flooding experienced by much of Australia earlier this year.

ALGA has argued that any reduction in the financial risk borne by the Commonwealth through reducing the funding it makes available to the states through the NDRRA, will simply increase the risks and costs carried by councils. This is essentially cost shifting: there is not likely to be an overall saving for taxpayers, just a shifting of the burden from federal taxes to local taxes, or rates. Equally, not allowing councils to be reimbursed for use of their day labour in disaster recovery will penalise many rural and regional councils that do not have immediate access to external contractors.

ALGA has also argued against any proposal that would introduce a national flood insurance cover scheme, whereby councils, through their rating schemes are expected to help subsidise premiums for high-risk properties. Local government is already constrained financially and it would be inequitable if further cost shifting of this manner was contemplated.

With respect to measuring flood risk, ALGA has reinforced that the Commonwealth and peak insurance sector are underestimating the real challenges facing all state and local governments in accurately modelling flood impacts. ALGA has also highlighted the importance of assessing what more can be done at the local and regional level to mitigate against such disasters in the first place.

The Review Panel will now consider all input as it prepares its report and recommendations for the Assisatant Treasurer, the Hon Bill Shorten MP, by 30 September, 2011. Access to all insurance review submissions can be accessed by clicking here.

This week's decision by the Australian Government to introduce carbon pricing from 1 July 2012 will have flow on effects for local governments and communities. As outlined in the announcement, the starting price of a carbon price will be $23 for each tonne of pollution. This will rise annually for three years until 1 July 2015, when the carbon price mechanism will then transition to an emissions trading scheme where the price will be determined by the market. The rationale for a carbon price is that it will create economic incentives for the biggest polluters to reduce their emissions of greenhouse gases.

ALGA supports the concept of a market-based approach to carbon pricing but further work on modeling and negotiations with the Federal Government will have to take place before we can determine the full impact of the carbon price mechanism on councils, and ultimately ratepayers.

From the measures announced as part of the Carbon Price Package, it is clear that waste is covered by the scheme but legacy waste is excluded, as negotiated at the time of the Carbon Pollution Reduction Scheme. Determining how to measure carbon pollution from waste, such as emissions from landfills, is not so clear.

We are concerned that there appears to be no standard method for measuring emissions from landfills and estimation methods are unreliable. Also, the costs of waste-related pollution will have to be met by landfill operators including many local councils, which will then ultimately need to be passed to ratepayers.

To reduce costs, councils can abate some emissions by recycling more. Examples could include the flaring of methane gas from landfill and the removal of organic products from landfill.

Further work will be required to understand the abatement opportunities, the full costs and practical implementation issues. But it is clear that waste management will cost more, we are just not sure how much until further modeling is done.

ALGA will be working with the Government to attempt to resolve the technical issues surrounding waste-related pollution so that local councils can understand their obligations under such a scheme and how best to manage carbon pricing and energy efficiency. We welcome the Government's willingness to discuss and clarify these issues and negotiate the effects of carbon pricing on councils and ratepayers.

The cost of fuel inputs for local governments will also increase as a result of the new measures. While light commercial vehicles and household vehicles will not attract a carbon price, other business transport will be subject to an equivalent carbon price, generally applied by reducing fuel tax credits. The Productivity Commission will conduct a review of fuel excise arrangements including an examination of the merits of a scheme based on a carbon price and the energy content of fuels. Again, we do not know how much that price increase will be.

The Government proposes to use more than 50 per cent of the revenue derived from carbon pricing to provide household assistance. Details of the programs announced can be found here.

I look forward to updating you on the outcomes of discussions with government and providing more detail as we clarify the real impacts on councils and our communities.

Mayor Genia McCaffery
ALGA President

Briefs

Support for constitutional recognition grows

A total of 363 councils have now passed resolutions supporting constitutional recognition of local government. This equates to 65 per cent of councils endorsing constitutional recognition and an increase of 15 per cent in support since last month's National General Assembly of Local Government.

South Australia continues its clear lead with 86 per cent of councils in that State passing resolutions.

The councils listed below have advised ALGA this week that they have passed resolutions:

• Roper Gulf Shire Council (NT)
• Leichhardt Council (NSW)
• Hawkesbury City Council (NSW)
• Armidale Dumaresq Council (NSW)
• City of Perth (WA)
• Buloke Shire Council (Vic)
• Cook Shire Council (Qld)
• Tumbarumba Shire Council (NSW)
• Forbes Shire Council (NSW)
• Mornington Peninsula Shire Council (Vic)

Population gain could offset emissions cuts

A sustainable population advocacy group has suggested that cuts in greenhouse gas emissions achieved through the carbon tax and other measures would be negated by Australia's growing population.

Sustainable Population Australia (SPA) says even if the Federal Government's emissions targets are met, the benefits will be wiped out before 2020 based on current population growth.

"While the opponents of a carbon tax will make much of the fact that our electricity prices will rise by around 10 per cent, a much bigger contributor already to electricity prices is population increase."

Ms Kanck, a former Australian Democrats MP in South Australia, said between 2007 and 2010 electricity prices rose by 20 to 30 per cent because of the increased costs of the distribution network, a direct result of more people needing power.

Sustainability Rating Scheme soon to be complete

A National Sustainability Rating Scheme for use by local governments is edging closer to completion.

The Australian Green Infrastructure Council (AGIC) has been driving the creation of the scheme for the past two years, incorporating innovation in the social, economic and environmental performance of infrastructure assets.

Upon completion in early 2012, the rating program will provide a common metrics framework for a sustainability assessment of the Australian infrastructure market, and will promote the sustainable design, construction and operation of new and upgraded assets.

The National Sustainability Rating Scheme comprises a web-based rating tool, a guideline and assessment manual, case study resources, and the formal AGIC assessor and verification processes together with training programs and industry awards and promotion.

To participate in the development of the National Sustainability Rating Scheme, visit the AGIC website.

Commonwealth literacy program extended

The Australian Government's Workplace English Language and Literacy (WELL) Program has been expanded, with more than 13,000 additional training places available over four years, starting from 1 July 2011.

The aim of the WELL Program is to assist local councils and other organisations to train workers in English language, literacy and numeracy skills. The 2011-12 Federal Budget included an expansion of the WELL Program and funding is available on a competitive grants basis to organisations for English language and literacy training linked to job-related workplace training.

The funding is designed to help workers meet their current and future employment and training needs. Projects should target workers who need to improve their language, literacy and numeracy skills in order to remain or progress in employment (including avoiding displacement) and address participants' employment and training needs.

Employers are expected to contribute at least 25% of training costs (50% for second and third year projects) and provide regular reports.

For application forms, program guidelines, hints and tips for applicants and other relevant information about the WELL Program, click here.

New service launched for children with disability

Parents of thousands of children with disability can now register to receive up to $12,000 in early intervention services.

The Australian Government has launched the $147 million Better Start for Children With Disability initiative.

About 9,000 children across Australia will be able to access a range of early intervention services and therapies such as speech pathology, audiology, occupational therapy and physiotherapy through the Better Start initiative.

Registrations opened to families on 1 July.

For more information, click here.

Funding for the National Year of Reading 2012

The Australian Government will be providing $1.3 million in funding for the National Year of Reading 2012.

The funding will support the One Country Reading and workplace literacy initiatives - two of the four key national programs for the National Year of Reading. Sponsorship is being sought for the two other programs - The Reading Hour and public library membership drive.

This funding is in addition to the Adult Learners' Week national grant funding provided by the Department of Education, Employment and Workplace Relations (DEEWR) for the "It's never too late ... to learn to read" competition. For more information, click here.

Study finds support for grid-style streets

A study has found that people living in traditional grid-style streets are more happy with where they live, and are more likely to be on good terms with their neighbours.

James Cook University town planning honours graduate, Matthew Ingram surveyed 154 households in Cairns for his award winning thesis.

He looked at three types of residential developments: grid-style, a mix of grid and cul-de-sacs, and one comprised entirely of cul-de-sacs.

The grid model came up trumps, with those residents most satisfied with where they lived, and enjoying better relationships with neighbours.

Nominate an Australian of the Year

The search for the next Australian of the Year Award recipients has begun.

Public nominations are the only way in which people can be considered for the awards and Australians are being encouraged to nominate someone they admire.

Australians can submit nominations in four award categories:

• Australian of the Year
• Senior Australian of the Year (60 years and over)
• Young Australian of the Year (16-30 years)
• Australia's Local Hero

Nominations can be made online or by completing a nomination form available from any branch of major sponsor the Commonwealth Bank or call 1300 655 193 for more information. Nominations close at midnight on 31 August 2011.