Two years on from celebrating our Centenary of Federation, the tabling of the Cost Shifting Inquiry Report has the potential to provide a mechanism for the long overdue reform of intergovernmental arrangements put in place when horse and buggy were our main form of transport. Yet the efforts of our Founding Fathers to Federating our nation should never be underestimated. No doubt there was some astute political manoeuvring to bring together the six colonial governments in a relatively painless, short period of time.
Of course two major players in this process were those pushing for a new national level of government, and then the Colonial Governments. However, Local Government failing to get even a mention in the new Constitution would indicate that its role in this process was minimal.
With the Colonial (State) Governments handing over only a few of their powers to a new Commonwealth Government, their original intention of strong States and a weak Commonwealth persisted through to World War II. But with threat of Japanese invasion, the States agreed that, in the national interest, they would hand over their power to raise income tax to the Commonwealth Government. Believing after the war that things would return to the status quo was a monumental miscalculation by the State Governments. With the High Court leaning more towards national interests, the Commonwealth Government retained the power of the purse and therein commenced strained financial relations, with the States generally coming off second best.
Duplication, overlapping and blurring of the roles and responsibilities across all three of our spheres of government have led to the proliferation of unfunded mandates and cost shifting by other spheres to Local Government. After many years of effort by the Australian Local Government Association and the State Local Government Associations to have this situation rectified, reform of intergovernmental financial arrangement is now high on the agenda.
It is interesting that the impetus for change has again not come from within, but has been influenced by factors outside this nation.This time it is not a military threat but an economic one. Globalisation and the need for nations to be internationally competitive has finally forced the hand of the Commonwealth Government to seriously look at intergovernmental financial arrangements. In turn, the CoAG summit recommended by the Cost Shifting Inquiry will also look at the roles and responsibilities of all three spheres of government. It will address the issue of who does what best, and how each level of government can be adequately funded.
This is a great breakthrough for Local Government and presents huge opportunities. President of ALGA, Councillor Mike Montgomery, was correct when he said that it is now incumbent on all Local Government to drive their form agenda from here, working collaboratively with the Federal, State and Territory Governments. He said that there is still a long way to go but the window is now open and Local Government must move quickly.
At the end of the day, all spheres of government are endeavouring to do the best for communities, and they all serve the same constituents. Bipartisan support for the recommendations of the Cost Shifting Inquiry is a great start. This momentum must not become sidetracked by inaction, or get bound down in political point scoring.
