The State and Federal governments have launched inquiries into the sustainability of local councils within a week of each other.
The House of Representatives Standing Committee on Regional Development, Infrastructure and Transport will examine local government sustainability in a new inquiry launched on March 21.
Committee chair, MP Luke Gosling from the Northern Territory, said the Committee had “prioritised a deeper understanding of local government financial sustainability and funding frameworks, alongside the changing infrastructure requirements and service delivery obligations for local governments”.
“Local government sustainability is essential to supporting our Australian communities through the provision of vital infrastructure and related services,” Gosling said.
“The Committee is seeking to understand the challenges faced by local governments in servicing infrastructure requirements across Australia’s regional, rural and remote locations.”
Gosling said the Committee was aware of significant public infrastructure workforce shortages, particularly in local government areas, and the importance of promoting skills development and job security for Australians.
“The Committee will examine labour hire and retention trends, including the impacts of labour hire practices, to identify barriers and opportunities to support our local workforce and local government sustainability and service delivery obligations,” he said.
The Committee welcomes submissions from interested organisations and individuals by May 3.
Further information on the inquiry, including the terms of reference and how to contribute, is available on the Committee’s website.
Meanwhile the NSW State Government has also started a government standing committee inquiry into the same topic but pulled the plug on the Independent Pricing and Regulatory Tribunal (IPART) which has already started a review.
The IPART review was shut down only four days after the closing date for public comments on its draft terms of reference.
At least one Central Coast resident feels he wasted his time submitting his thoughts on the terms of reference.
“It seems odd that Premier Minns wrote to IPART on January 11 commissioning this review, then writes again two months later cancelling it,” community activist Kevin Brooks said.
“Ratepayers such as myself who took the trouble to make submissions have wasted their time.”
Premier Chris Minns said the reason for stopping the review was to avoid unnecessary duplication, as the matter was being considered by the NSW Parliament’s Standing Committee on State Development.
“The Committee will inquire into and report on the ability of local governments to fund infrastructure and services,” Minns said.
Brooks said Minns suggests that his alternative review by Parliamentary Committee will be focussed on council funding.
“He doesn’t mention concerns of ratepayers about how well or efficiently the funding is being spent,” Brooks said.
“Average rates in NSW increased double the rate of CPI inflation between 2010 and 2020 – so there has been no shortage of funding from ratepayers.
“Value for money, quality of management across the sector, productivity, efficiency, culture and prioritisation are more important issues,.”
The NSW inquiry is scheduled to begin shortly, and it is anticipated that the Committee will report ahead of the Local Government elections, which are scheduled for September 14.
IPART had been planning a more expanded timeline of providing a draft report 12 months after settling on its final terms of reference.
It had first recommended the review be held.
“Last year, as part of our review of the local council rate peg methodology, stakeholders raised concerns about the affordability of council rates in the current cost of living climate, as well as community consultation, financial management and financial sustainability of councils in NSW,” IPART Chair Carmel Donnelly said in a January press release announcing the now-dead review.
“IPART noted many of the issues raised cannot be fixed by the rate peg or the special variation process and we therefore recommended the NSW Government commission an independent review of the financial model for councils to identify improvements.”
Chair of the committee conducting the new inquiry, MLC Emily Suvaal, said councils are experiencing significant financial challenges which are threatening the long-term sustainability of the sector.
“As the level of government closest to the people of this state, we owe it to councils to ensure they can continue to deliver the important services communities expect and deserve,” she said.
“This inquiry will examine the level of income councils require to adequately meet the needs of their communities, and give consideration to the current levels of service delivery and financial sustainability in local government.”
The terms of reference for the Standing Committee’s review are not the same as IPART’s draft terms of reference.
The new inquiry will look at the level of income councils require to adequately meet the needs of their communities and examine if past rate pegs have matched increases in costs borne by local governments, including the impacts over 20 years and comparisons with other jurisdictions.
It will also look at current levels of service delivery and financial sustainability in local government, including the impact of cost shifting on service delivery and financial sustainability, and whether this has changed over time.
It will review the operation of the special rate variation process and its effectiveness in providing the level of income Councils require to adequately meet the needs of their communities.
So, in other words, the work of IPART in setting rates will be part of the review.
IPART’s review was more focused on such things as: “the visibility of councillors and the community over the financial and operational performance of their councils; whether current budget and financial processes used by councils were delivering value-for-money for ratepayers and residents; whether the current funding model would sustainably support the needs of communities; and whether both councillors and staff had the financial capacity and capability to meet current and future needs of communities.
The new inquiry is accepting submissions from interested individuals and stakeholders, including local governments and members of the community.
The closing date for submissions for the State review is Friday, April 26.
The closing date for submissions for the Federal review is Friday, May 3.
Merilyn Vale