Tuesday November 18 was an early Christmas surprise for Sunshine Coast Mayor Bob Abbot and his fellow 550 Australian mayors. Prime Minister Kevin Rudd and Local Government minister Anthony Albanese sat them all down in Canberra to announce a new, 5 year, $300 million fund to funnel cash directly into local government coffers. This was the culmination of a three year campaign by Bob and his fellow directors of the Australian local government associations.
In its first allocation the Federal Government handed out $1.345 million to the Sunshine Coast Regional Council. Hinterland Times editor, Michael Berry discussed the implications of this federal initiative with Mayor Abbot on his return from Canberra.
HT: Where did this initiative come from?
BA: The Prime Minister and minister Albanese are pushing this. I suspect there’s a bit of Labor ideology here that goes back to Whitlam’s first links with local government, Tom Uren’s work on regional development and even Paul Keating’s attempts to have local government recognised in the Constitution. It’s not just a Labor concern but it’s taken until now for the Rudd government to simply see a better way to get Federal Government money on the ground throughout the country.
HT: Is there a suggestion here that money due to local government is not getting through?
BA: Well, the cost shifting study that Minister Tuckey did some years ago discovered there were some $200 million of Federal Government money that was not getting to where it was supposed to go because it was being siphoned off in different places.
HT: $1.3 million doesn’t sound like a lot of money in terms of Council’s budget. How was that amount arrived at?
BA: There was a base amount of $100,000 for every local authority, with $300,000 to be added to that if you were considered to be in a growth region. And the rest of it was divvied up on the basis of the Commonwealth Grants Commission evaluation. They came up with $1.345 million that we never had before. So thank you very much.
HT: What will you spend it on?
BA: This money has to be spent on projects already planned for, it has to be spent on projects that we wouldn’t have spent your rates money on in tight times; it has to be spent on things that create jobs. So, carpenters, plumbers, bricklayers or whatever. It’s about stimulating the local economy. It might be work on shire halls, repairing public toilets. It might be constructing one or two buildings somewhere. We’ll come out with that list fairly soon. There’s going to be a bunfight in council to see who gets the money, and I note that a number of councillors have already said that they want that money spent in their division.
What hasn’t been stated clearly I think is that it’s also a litmus test for local government to see how they react to being given money to do projects. The Federal Government won’t want to be giving money to local governments to keep their rate bills down. It must enhance their capacity to build more things in their communities
HT: Is this federal move likely to put the state government’s nose out of joint,
BA: It may well do, but then again it may not. They have being trying to load costs down to us over the years, of shifting responsibility, and this may well free them up so that local government is not constantly hanging on their ear as a wart, so to speak.
HT: Is this a subtle funding manoeuvre to indicate that we don’t need the state government?
BA: I don’t think there’s any deliberate move to remove the states from the Australian system. But there is certainly a move to find a more efficient way to do business and get more of the tax money where it deserves to be.
HT: You have spent a lot of time working on creating this funding link with Canberra. What do you want long term?
We started this campaign three years ago through the Australian Local Government Association (ALGA). We called for fair funding and fair recognition, and the work that we’ve put in behind the scenes with ministers and prime ministers, first with the Howard government and they were keen. So it’s not just about Labor. What we are saying in ALGA is that the Federal Government holds 72% of the total tax take. The states get 23% and we get 3%. What local government has been asking for is 1% of the total tax take, but in the form of a growth tax, so that it follows productivity rather than CPI . We want to be in that growth tax and GST regime. Whatever way we can do it there is a large share of the tax take that we’re not getting.
What’s important is that the Federal Government has finally come to the conclusion that what they have here is a very viable relationship, both politically and financially with local government.
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