In each edition we feature the views of a Local Government Association President. The following is from Councillor Col Sullivan, President of the Shires Association of New South Wales.
Government should remove rate pegging where Councils can demonstrate adoption of long term financial and strategic planning, and total asset management. The Minister could still veto rate increases, but Councils would have a powerful argument if they adopted sound financial and asset management practices.
If we do not tackle our infrastructure failings together with the State Government, it will not be a Local Government problem we are looking at in the future. It will be a State Government crisis where they will have to take over the delivery of services if a Council goes under.
The lack of a genuine partnership is best illustrated by the fact that NSW is the only State in Australia which suffers rate pegging. It has removed the capacity of Councils to build up capital reserves. It demonstrates a lack of confidence in Local Government by the State Government. In fact, rate pegging has been a major factor in forcing Councils into financial hardship. If a business faces cost increases, it passes on those costs to its customers. But Local Government cannot do that, by law.
The current Minister has also encouraged Councils to seek rate variations where they comply with the relevant conditions. But it is a band aid solution. After more than a century of existence, Local Government in consultation with the communities which elect them, are responsible enough to have the dead hand of rate pegging removed.
There is an urgent need for an intergovernmental agreement with the New South Wales Government, as recommended by the Allan Inquiry into the financial sustainability of Local Government in this State. I would suggest that the intergovernmental agreement signed off between the Federal and State Governments and ALGA last month is a striking example of what we should also be able to achieve between ourselves and the State Government in New South Wales.
Observers of Local Government say the relationship between State and Local Government in New South Wales is the poorest of all the States. This is surprising given that about a quarter of the State MPs owe their training to their time served in Local Government.
I think it is essential that we build a better relationship with our State Government, whoever is in power on the day. There is a lack of mutual respect, and when you look at areas like infrastructure replacement, health, transport and planning reform we need to achieve mutually satisfactory outcomes.
What I would like to see is an intergovernmental agreement with the NSW Government that lays down hard and fast rules for both parties. I would dearly like to see both the Government and the Opposition commit themselves to signing an agreement with us before the end of 2006.
