The Good Oil by Rod Brown *
The Hon. Wilson Tuckey, Commonwealth Minister for Regional Services, Territories and Local Government, was in full flight recently in Boulia (western Queensland) when stirring up interest in the upcoming inquiry into Local Government and Cost Shifting, by the Standing Committee on Economics, Finance and Public Administration. “We’ve not only got cost shifting at the moment, we’ve also got blame shifting. It’s always somebody else’s fault. Well I want to make it your fault. I want you to have the responsibility and be answerable and not wanting to blame anyone else … if you feel that your political commitment to a particular State Government or the Premiers is such that you’re prepared to let them screw you, well be my guest … we’ve got to take these issues on. I want to do it, I can assure you that I’m quite happy to use the iron bar on some occasions,” he stormed.Now Wilson is not your standard politician, and he has a reputation of being outcomes focused and ‘straight up’. While this enquiry could be the breakthrough that Local Government has been looking for, it could equally be a disappointment.
The downsides include the following.
- The Standing Committee only examines cost shifting by State Governments – why wasn’t Commonwealth cost shifting included, even if it is minor?
- With Labor Governments in power in every State and Territory, the inquiry recommendations will be seen as gratuitous advice from a Federal Coalition Government (irrespective of the multi party membership of the Standing Committee).
- The terms of reference stating that the recommendations must be budget neutral.
Wilson is thus in danger of swinging a feather duster rather than an iron bar. So how can we save Wilson this embarrassment, and ensure that Local Government achieves real outcomes from this process, rather than being treated as a bit player?
As I have said before in this column, Local Government has to negotiate its way into a New Deal. Local Government has no real scope to increase its revenue to deliver the increasing number of tasks demanded of it. Its legal parents, State Governments, are not offering much, and Local Government cannot blithely hitch itself to Federal agendas, without having the States somewhere in the picture.
Somehow it needs to deal with the Federal and State Governments from a position of strength. In this context, the overwhelming competitive advantage of Local Government is its proximity to the citizens and taxpayers – this is the achilles heel of the Commonwealth Government. Commonwealth program delivery mechanisms reflect this, being generally top down, cumbersome and inefficient. I therefore suggest that Local Government should think outside the square, by identifying the BIG AGENDAS facing the Commonwealth Government over the next 10 years, and then zeroing in on the niches where Local Government could really assist the Commonwealth.
From my perspective, the following four big agendas stand out.
- Health
- Education
- Natural resources and environment
- Border security/ immigration/defence/ policing.
Local Government can perform upgraded roles in each of these areas if they are compensated accordingly by the Commonwealth. Examples are aged care, health centres, citizen security, regional and economic development, environmental management, bedding down of migrants, disadvantaged youth and so forth.
But how can resources be secured if the inquiry stipulates that the recommendations must be budget neutral? There are three main options for Local Government.
- Identify areas where it can assume an upgraded role and deliver cost savings to the Commonwealth. (Some Local Governments are well placed to administer Commonwealth programs on a fee for service basis.)
- Develop creative cocktails of program assistance across three levels of government (and thereby leverage into various existing Commonwealth programs).
- View the budget neutrality stipulation in the widest sense, which then allows the running of an ‘off setting savings’ argument in the context of the Commonwealth Budget.
In this regard, the inquiry’s terms of reference actually refer to ‘the capacity of Local Government to meet existing obligations and to take on an enhanced role in developing opportunities at a regional level, including opportunities for Councils to work with other Councils and pool funding to achieve regional outcomes’. For example, one innovative ROC in NSW has discussed the formation of an Economic Development County Council to achieve this exact goal, but it really needs a commitment from both the Federal and State Governments to make these things work.
The pooled funding concept can of course apply not only to Councils sharing the costs of graders or the like – it should also involve Commonwealth expenditure. There are countless opportunities for the three levels of government to pool scarce resources, if only people took a fresh look at things. There is a further opportunity. The logic is as follows. Federal elections are generally won or lost in the marginal seats in the outer suburbs and regional cities.
What if, as a result of the inquiry recommendations, the Howard Government decided three months out from the next election to announce a $1 billion New Deal for 15 – 20 electorates over three to four years? It could be portrayed as a set of policy trials, with each trial relating to a different area of opportunity for Local Government – perhaps a trial of one or two economic development zones, health services in remote areas, community policing, infrastructure development and tax breaks to facilitate new migrant communities in regional areas, improved public schooling and so forth.
Now before the bean counters come down on me – a $1 billion package might mean a cost to budget of only $200 million – the balance could come from leveraging into the big program portfolios such as environment, health, education, defence – taking a bit here and a bit there. I call them cocktails.
If the anticipated efficiency savings can be documented, even Treasury and Finance would take an interest, and when the sums are spread over three to four years they become manageable.
There is one last option. The inquiry is scheduled to run until mid 2003. This means that the Howard Government would be looking at budgetary implications of the recommendations in the autumn of 2004 – and the Federal Budget follows later that year. The inquiry thus provides a platform for a New Deal.
However it would probably require the Commonwealth to have an almighty stoush with the States, and to use the inquiry to justify changes to the Commonwealth-States grants formulae, and then channel funds direct to Local Government for specified purposes. This has a nice statesman like ring to it in the lead up to a Federal election, and the Commonwealth has oodles of power in this area. Mr Tuckey thus has more than a feather duster in his hand.
* Rod Brown’s Canberra based consultancy group, Australian Project Developments Pty Ltd, specialises in industry/regional development and government liaison. For further information telephone (02) 6231 7261 or email apd@orac.net.au
