The fifth and final Issues Paper to be prepared as part of the Reform of the Federation White Paper process, COAG and Federal Financial Relations was released in February.
The paper looks at two aspects of Australia’s intergovernmental structure; the institutional framework in which intergovernmental relations are conducted, and the supporting federal fiscal system.
The paper traces the history of the establishment of the Council of Australian Governments (COAG) including ALGA’s membership from its inception, the role of COAG, the Ministerial Councils and the process and governance surrounding the group.
Much of the paper focuses on Commonwealth-state financial relationships but there is a dedicated focus on the Commonwealth-local government financial relationship which looks at local government’s expenditure, the responsibilities of local government, revenue raising capacity and the level of grant assistance from other levels of government.
The Issues Paper makes the argument that as the Federation and Tax White Papers will consider the expenditure responsibilities and revenue raising of each level of government, the revenue and expenditure base of local government would need to be considered in light of any wider changes to federal financial arrangements.
The Issues Paper also looks at the High Court decisions that have affected the financial arrangements of the Federation, including those of particular interest to local government, Pape and Williams I and II.
The paper poses a series of questions related to local government including:
What, if any, unnecessary duplication and overlap occurs in roles and responsibilities between local governments and other levels of government?
What should the division of roles and responsibilities between local government and other levels of government be?
What, if any, reforms are required to the revenue-raising powers and other revenue sources of local government?
These are questions that cut to the heart of the direct Federal-local government financial relationship, a relationship that must be preserved in any reform of the Federation.
ALGA will be preparing a response to each of these questions and I suggest that councils think about their own views on these matters.
It is vital that local government puts its case for the relationship with the Federal Government to be preserved, and even strengthened in any reform.
The Green Paper setting out options for reform is expected to be released in the second half of the year, ahead of the White Paper in early 2016.
The Issues Papers are available on the Reform of the Federation website
www.federation.dpmc.gov.au.
