2007 was dominated by the Federal election, with the mood for change gaining momentum throughout the year. Major challenges including the impact of climate change, addressing the growing infrastructure backlog and the financial sustainability of Councils have dominated. The following summarises our opinions on how Local Government continues to step up to the mark on these vital issues.
January – PricewaterhouseCoopers report finds $14.5 billion infrastructure backlog
The PricewaterhouseCoopers (PWC) report, commissioned by the Australian Local Government Association (ALGA), was released on 4 December 2006. Following various State LGA inquiries, this study provides a national perspective of the difficulties many Councils are experiencing in keeping up with current service needs while trying to address a growing backlog of infrastructure maintenance and renewal. Similar to the State LGA inquiry findings, the PWC study found that between 10 and 30 per cent of Councils have significant sustainability issues and that Local Government has an estimated $14.5 billion backlog in infrastructure renewal work.
March – Water a key election issue
With the run up to the Federal Election in full swing, a recent Newspoll survey published in the Australian newspaper found 82 per cent of respondents said water planning was a key issue, placing it ahead of health, education and the environment. With much of the continent reeling from drought, the five major capital cities with their water capacity running between 20 and 33 per cent (only Hobart and Darwin currently have reasonable reserves), and numerous regional cities and rural towns under stage 4 or 5 water restrictions, water is certainly the hot topic.
April – and Climate change
Visiting Australia in March, British Economist, Sir Nicholas Stern, warned that the world risks a temperature increase of around five degrees Celsius in the next century, unless immediate action is taken. He said if we continue with business as usual, this will be “absolutely planet transforming”. Climate change is certainly a matter of concern for all governments worldwide, and this concern must be translated into immediate actions.
May – Productivity Commission review of Local Government revenue sources finally starts
Last month Federal Treasurer, Peter Costello, announced that the Productivity Commission will commence a study into Local Government’s own revenue sources. This was one of the key recommendations of the Hawker ‘Fair Share’ Inquiry that was tabled in Parliament in November 2003. The Government committed to such a study back in May 2005. Better late than never, the Treasurer’s press release said, “The study will provide the States and Territories with a clearer picture of Local Government’s financial capacities and the sources of revenue available to them. The study will examine the capacity of different types of Councils to raise revenue, the impact of the various revenue sources available to Local Government, and the regulatory environment surrounding Local Government’s revenue raising capacity.”
June – Budget delivers no new funding for Local Government
The Budget was certainly a much needed shot in the arm for road funding and various current programs that will have a flow on benefit to local communities, and ALGA and the State LGAs are to be congratulated for their efforts to secure this on behalf of Councils and their communities. However, in spite of this being an election year, no new initiatives for Local Government were announced. It is now well documented that Councils face a massive across the board backlog in infrastructure maintenance and renewal that is growing exponentially. Yet the Local Community Infrastructure Renewals Fund (LCIRF), recommended by the recent PricewaterhouseCoopers report into Local Government financing, did not get a guernsey.
July – Short term electoral cycles a challenge to long term asset management
There is a growing recognition across all spheres of Government that financial sustainability and asset management are inextricably interwoven and must be treated as such. However, the reality of political life means that elected members tend to be primarily focused on the next election. This results in long term plans, say over the next 10 or 20 years, being somewhat off the radar. Similarly with the community, people are more than happy to see new capital projects, such as new sports facilities, roads and the like, but few realise that on average the initial outlay for these projects is likely to be around 20 per cent of the total life cycle costs, not to mention ultimate replacement once the facility reaches its use-by date. Without long term planning to address these issues, future generations will face massive debt, resulting in higher rates and charges or severely reduced services, and possibly both.
October – Finally the election is called
With the polls indicating that a Labor victory is likely, there seems to be a mood for change at the Federal level. However,
16 seats is a very large hurdle and the Prime Minister is very much a wily campaigner. Given this, it is most likely the campaign will be a long one, with some predicting six weeks. So hang on to your hats – it is certainly not going to be boring.
November – ALGA’s 10 Point Plan
ALGA through its election document ‘A 10 Point Plan to Reinvigorate Local Communities’ has called on major political Parties to commit to the Constitutional recognition of Local Government, provide one per cent of direct taxation revenue to Councils and establish a Local Community Infrastructure Renewals Fund. The plan is available on the ALGA website at www.alga.asn.au
December – Australian voters opt for change
