The end of 2015 is now fast approaching, and with it, the ideal timing for the release of the Green Papers on the Reform of Federation and Taxation.
It has now been almost 18 months since these White Paper processes began, with Council of Australian Government (COAG) Leaders committing in May last year to work closely and collaboratively on the two White Papers. The Leaders agreed on the objective of realising opportunities to ensure that the federation and tax system are both functioning well, supporting a strong, dynamic economy and delivering effective services to the economy.
The release of the Green Papers before the end of the year will allow those interested in reform to provide their comment and input on the options that the Commonwealth is looking at in terms of roles, responsibilities and taxation. The Government will then be expected to settle the White Papers in time for the 2016 election and take initiatives emerging from the processes to that election.
The major opportunity for us in Local Government in the development of the Federation White Paper is to gain recognition of the legitimate role Local Government plays in the Federation. We have the chance to highlight the value we add to the Federation, the role we play and the resources we need to do that job, which can be provided through our own source revenue, including our single tax base (property rates), or through intergovernmental transfers such as the Financial Assistance Grants.
The Taxation White Paper presents Local Government with a different challenge: to maintain and strengthen the integrity of our only tax base – municipal rates. The process also gives us the opportunity to strengthen the argument for adequate allocation of tax revenues from other levels of government to Local Government to allow us to meet our community’s local service and infrastructure needs.
Local Government must be part of any solution to the problem of Vertical Fiscal Imbalance that might emerge from the White Paper processes.
