The tabling on 24 November 2003 of the Commonwealth House of Representatives Inquiry into Cost Shifting onto Local Government recommends a major overhaul of intergovernmental relations. The unanimous report confirms overwhelming evidence of cost shifting to Local Government from all levels of Government. It is the culmination of an extensive 18 month public inquiry.
“The inquiry has revealed some stark and disturbing realities,” Chair of the Inquiry, David Hawker MP, told the House of Representatives.“The most immediate and obvious being that cost shifting is largely a symptom of a growing crisis in Australian governance. Our system of Federalism is fracturing under the weight of duplication and coordination costs between the three levels of government, and it is costing the Australian community around $20 billion a year. This cannot continue if we are to remain competitive internationally.”
The committee placed before the House of Representatives 18 recommendations aimed at addressing cost shifting.
Speaking of the recent National General Assembly of Local Government after the report was tabled in Parliament, Mike Montgomery, President of the Australian Local Government Association, said this is a major breakthrough for Local Government.
“The report has paved the way for a new beginning, including a serious role at the table for Local Government to negotiate the way forward,” Councillor Montgomery said.
Major recommendations include the following:
- a strong call for an Intergovernmental Agreement
- formal recognition of Local Government by the Federal Parliament
- a Council of Australian Government (CoAG) summit in 2005 to decide which level of Government does what best and how it is to be funded
- a proposed process to ensure the renegotiation of roles and responsibilities and funding between the spheres of Government
- financial Assistance Grants (FAGS) be paid directly by the Commonwealth to Local Government.
“This is probably the best outcome we would have hoped for from a Parliamentary Report of this nature,” Mike Montgomery said. “There are some details on the margins that must be thrashed out with other spheres of government, and a few recommendations must be treated cautiously, in particular the potential consequences of changes to the methodology of FAGS.
“However, we must not allow ourselves or our State Governments to be distracted by differences over detail. If we drop the ball, we probably won’t see another opportunity like this in our lifetimes. This is a time for national leadership and effective collaboration, to achieve a sound basis for recognition of the three spheres of Government and effective mechanisms to work together for the communities we all serve.”
