President’s comment
Victorian local government is facing a series of reform pressures imposed from above, including an unwanted role as the State’s tax collector of their new fire services property levy; differential rating guidelines that seek to limit councils’ autonomy; and standard benchmarks that publically report on council performance.
There is also a continuing trend of state and Commonwealth governments ignoring the intent of the Intergovernmental agreement on cost shifting (IGA) and the Victorian state-local government agreement. The Productivity Commission and the Victorian Competition and Efficiency Commission have both recently raised concerns about the growing regulatory burden imposed on councils by other levels of government.
In recent times, the MAV has been called upon to respond to government, parliamentary and industry proposals that suggest local government is best placed to take on additional new roles, such as responsibility for urban flood levies, central registration of all buildings containing asbestos, collection of a state levy to fund transport infrastructure, and the list goes on.
The cumulative impacts of imposed reforms are unsustainable on our sector. Change is enforced without a holistic examination by governments of councils’ capacity, or the capacity of our communities to fund these changes. We now believe there is a need for regulatory impact statements as a mandatory precondition before local government roles are adjusted or expanded.
Victoria is not alone. Nationally, reform is being enforced on councils by state governments through amalgamation, de-amalgamation and other structural reforms. The issue here is not change — it’s that it is not the sector initiating its own evolution, but complying with state-imposed reforms.
Victorian councils are, however, demonstrating self-reform through shared procurement, the STEP Planning Improvement Process and other innovative shared-services initiatives. But there is more to be done.
An important step in the future of local government is financial recognition in the Australian Constitution. This recognition is vital to the certainty that much needed funding for essential community infrastructure will continue to flow from the Commonwealth without court challenges.
Councils are increasingly relying on Australian Government financial support to deliver a number of important infrastructure projects and to maintain the level of service delivery demanded by communities.
Despite making direct payments to local government for many years, the Government may lack the power to do so after recent High Court cases ruled that the Australian Government can only spend money where it has a specific power under the Constitution.
Both the Australian Government-appointed Expert Panel and a Joint Select Committee on Constitutional Recognition of Local Government have backed a referendum to financially recognise councils in our Constitution.
It is this type of reform that local government will welcome. But we must also continue our own reform journey – to innovate and transform our future as a sector in a way that is efficient, effective and responsive to the 21st century needs of our communities.
