2007 is certainly going to be an interesting year. Being a Federal election year (expected around September/October), it was surprising that neither the Prime Minister nor Opposition Leader found the time to speak at the recent 2006 National General Assembly of Local Government. Unless the PM opts for a later date (early in 2008), this was the last opportunity prior to the election for the national leaders to address Local Government leaders at their annual national forum.
There is no doubt in 2007 that the financial sustainability of Councils will continue to be a key issue dominating Local Government’s relations with the other spheres of government. The PricewaterhouseCoopers (PWC) report, commissioned by the Australian Local Government Association, was released on 4 December 2006. Following various State LGA inquiries, this study provides a national perspective of the difficulties many Councils are experiencing in keeping up with current service needs while trying to address a growing backlog of infrastructure maintenance and renewal.
Similar to the State LGA inquiry findings, the PWC study found that between ten and 30 per cent of Councils have significant sustainability issues and that Local Government has an estimated $14.5 billion backlog in infrastructure renewal work. PWC recommends a twin track approach for improving financial sustainability through Councils continuing to pursue “internal reforms to improve efficiency and effectiveness” and the proverbial “changes to intergovernment funding” arrangements.
With intergovernment funding, the report calls for an overhaul of the current Financial Assistance Grants (FAGs) and a new formula taking account of both wage cost and construction cost indexes not just CPI.
It says that the Roads to Recovery program needs to be made permanent, and recommends a similar funding program for local community infrastructure renewal be established. The report states that between $200 to $250 million per annum is required to support Councils in the $1 billion backlog of renewal of community facilities but priority must be on renewal and replacement not building new facilities.
In spite of little mainstream media coverage with the launch of the PWC report last December – the change in leadership with the Federal Opposition was certainly predominating national news at the time – there was some pick up by the ABC in the first week of January.
Being the silly season much of this will have been lost on both politicians and their constituents, so in the lead up to the election it is over to Councils within their local areas to be canvassing sitting members and candidates for a much better financial deal. Councils need to get the message out to their residents about the dire consequences of a $14.5 infrastructure backlog, and how this will impact lifestyles and local amenity around the nation.
