Mayor Troy Pickard, ALGA President
Last month, the Australian Local Government Association (ALGA) held its annual National Local Roads and Transport Congress, where the 2015 National State of the Assets: Roads and Community Infrastructure Report was launched.
Figures highlighted in this report raised some critical points about the funding arrangements in our Federation that need to be considered as part of the White Paper on Reform of the Federation and the White Paper on Taxation.
According to the Australian Bureau of Statistics, governments in Australia own a little over a trillion dollars’ worth of non-financial assets ($1088 billion) on written-down value. The same statistics show that the written-down value of Local Government non-financial assets is $354 billion, or approximately 32 percent of all government non-financial assets, and that of State Governments and the Commonwealth is 54 percent and 10 percent respectively. The remaining four percent is jointly owned by the Commonwealth and the states.
These figures paint a telling picture when examined against the revenue-raising capacity of each level of government.
The Commonwealth has responsibility for just 10 percent of total government non-financial assets and yet it has access to approximately 82 percent of total taxation revenue.
States, although responsible for 54 percent of total government non-financial assets, has access to about 15 percent of total taxation revenue.
And Local Government, responsible for nearly 33 percent of total government non-financial assets, has access to a mere three percent of total taxation revenue.
Tax revenue clearly does not align with asset responsibilities and we see the results of the skewed funding at the Local Government level with the State of the Assets report revealing that about 11 percent of Local Government assets are rated as being in poor or very poor condition.
One of the objectives of the White Paper on Reform of the Federation and White Paper on Taxation is to align, as far as possible, the revenue-raising capacity of each tier of government with its responsibilities of funding and service delivery.
The State of the Assets Report makes an important contribution to this debate and to the knowledge base of ALGA and indeed the Commonwealth and states, particularly as we progress the White Papers.
