In each edition, we feature the views of a Local Government Association President. The following is from Councillor Tom Pyne AM, President Local Government Association of Queensland.
I’m sure that I don’t need to remind you that Local Government is never without its challenges and it is the multi dimensional challenges that State and Federal Governments have placed before us as they negotiate a new taxation regime that I will remember most as truly reflecting their attitudes to governance at the local level.
The Federal Government has treated Queensland Councils, and I dare say across the nation, with callous disregard the whole way through the GST package saga. We’ve been their plaything, thrown from pillar to post at the whim of Canberra’s wheeler dealers.
It’s a far cry from Malcolm Fraser’s day, when his coalition government respected and encouraged Local Government by increasing significantly the level of both tied and untied Council funding and local road grants.
When the coalition government announced the tax package prior to the last Federal election, it capriciously flicked on the responsibility for funding Local Government to the states, without ever explaining its reasons and with no regard for Councils’ future.
Now we have this eleventh hour backflip, with the Coalition Government choosing to retain responsibility for funding Councils on the existing less than generous per capita real terms funding arrangement. This was done simply to cobble together a political face saving tax package.
The tax ‘deal’ reached between the Federal Government and the Australian Democrats on 28 May was the biggest betrayal visited on Queensland Councils since the Second World War. This so called ‘historic deal’ will cost Queensland Councils, and the communities they serve, half a billion dollars in extra funding over the next decade and God knows how much more in the longer term.
By disregarding the fact that Queensland Local Government had secured a unique deal with the Queensland Government and its opposition for a fixed share of the State’s GST allocation in lieu of Federal funding for Councils, the Federal Government dumped on us for a second time.
The fact that the funding security of Queensland Councils has been sacrificed on the altar of political expediency will not be forgotten &endash; nor will it go unanswered. How can Local Government in Queensland ever again trust the Democrats, given their fast and loose double dealing on this issue? Don Chipp’s dream of ‘keeping the bastards honest’ has been lost.
Repeatedly, the Democrats have pledged undying support to Local Government, first promising a fixed share of GST funds, then supporting Councils’ cause in the Senate. Then they sold us out for 30 pieces of silver.
The Federal ALP, which chose to play cynical politics instead of coming to the support of Queensland’s Councils in Parliament, has not covered itself in glory.
Not only have Councils lost a fixed share of the GST, they have suffered a big blow on the reworked and watered down diesel fuel deal. South east Queensland Councils will now lose altogether any savings from reductions in diesel fuel, while rural Councils have seen their diesel fuel saving shaved by two cents a litre. By our calculations, the original $18 million a year Councils would have received from the tax package has been halved.
By any reckoning, Local Government is a major loser under the renegotiated tax package and any claim that Local Government has achieved what it wanted from the reform of the taxation system is fanciful and ignores the policy position adopted by Local Government nationally.
In Queensland, Councils have lost access to a guaranteed $500 million over the next decade. Across the nation, State Governments have been relieved of any responsibility of sharing their GST revenues by way of financial assistance grants with Local Government because the responsibility has been returned to the Commonwealth.
The Commonwealth, in taking back the responsibility, will do so only on the basis of maintaining the current real terms per capita annual adjustment. Arising out of the taxation package, the Commonwealth has been relieved of a significant proportion of its funding commitments to the States; the States will now have access to a growth tax giving them predictability in funding levels and Local Government’s position has at best in the short term remained static, but will continue to weaken as its share of public sector revenues drop while its devolved unfunded mandates and public expectations increase.
The bitterness caused by this sell out by the Federal Coalition Government and the Democrats will last a generation. Every time a Council cannot fund vital community facilities and services, ratepayers will be told who caused the problem.
The Association has called upon Queensland representatives in the Federal Parliament to intervene to protect the interests of their constituents. If Local Government is to be denied the funding security available and negotiated with the State Government under the original package, then it is incumbent upon the Commonwealth to provide a fixed percentage share of its taxation revenues not less than the current level of FAGs funding provided to Local Government.
I would encourage Local Governments nationally to do the same, and quickly, to their own Federal members. For this country, as far as local communities go, not enough is not enough.
