On 12 April 2006, Local Government Ministers from the Australian, State and Territory Governments and the President of the Australian Local Government Association signed the Inter-governmental Agreement Establishing Principles Guiding Inter-governmental Relations on Local Government Matters. The development of the Agreement between the Australian, State and Territory Governments and the Australian Local Government Association in consultation with State and Territory Local Government Associations, heralds a watershed in the history of government in Australia. For the first time, the three spheres of government have agreed on a framework within which services are to be funded and delivered to the community at the local level.
The Agreement is a significant outcome in response to the November 2003 report of the House of Representatives Standing Committee on Economics, Finance and Public Administration – Rates and Taxes: A Fair Share for Responsible Local Government (the Hawker report). This report recommended the development of an inter-governmental agreement to address cost shifting onto Local Government.
In its response, the Australian Government announced that such an agreement was supported in principle and that development of an agreement would be pursued. The Local Government and Planning Ministers’ Council in June 2004 also gave in principle support to the development of an inter-governmental agreement on Local Government relations.
Local Government is responsible for more than just roads, rates and rubbish. It plays a critical role in town planning, health and environmental protection, the provision of water and sanitation services in those jurisdictions where this is a municipal responsibility, as well as the provision of health services and cultural, leisure and sporting facilities. The adequacy of resources available to Local Government is significantly impacted by cost shifting onto Local Government.
The inter-governmental agreement does not attempt to define cost shifting but addresses it by obtaining in principle agreement from governments that when a responsibility is devolved to Local Government, Local Government is consulted and the financial and other impacts on Councils are taken into account.
The objectives of the inter-governmental agreement include providing for greater financial transparency between the three spheres of government in relation to Local Government services and functions. In addition, the agreement aims to improve the relationship and consultation between governments on Local Government matters.
The inter-governmental agreement also seeks to provide an overall framework for developing further agreements between Local Government and the other spheres of government. This includes consulting and making agreements with individual Councils and, where appropriate, Local Government peak representative bodies.
The Australian, State and Territory Governments and Local Government look forward to future cooperation under the Agreement to achieve the best possible outcomes for communities.
