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Outcomes for Costs Shifting Inquiry

Members of the Federal Standing Committee on Economics, Finance and Public Administration ('the Committee'), met on Wednesday, 25 March 2003 at Parliament House with representatives of Local Government Associations (LGAs) from all States and Territories about the Committee's deliberations to do with the Inquiry into Cost Shifting onto Local Government and the Financial Position of Local Government in Australia.

'The meeting was arranged as part of what was probably the last session the Committee will have with LGAs before it delivers it findings for the Inquiry in the next couple of months' President Black said.

'All LGAs and many individual Councils have put submissions to the Inquiry, and Committee members acknowledged that expectations amongst Councils were high about outcomes from the Inquiry'.

"We suggested a number of courses of action to the Committee", President Cecil Black said, "including having the Commonwealth Government: acknowledge that cost shifting onto Local Government by State/Territory and the Commonwealth Government occurs and is a substantial problem; quantify the extent of cost-shifting; take measures to ensure public sector revenue is fairly shared across all three spheres of government; develop an inter-governmental agreement (IGA) to address cost-shifting on specific service provision; and enforce the terms of the IGA through appropriate compliance provisions."

"We pointed out to the Committee that the Commonwealth Government is the major earner of tax revenues in Australia and that there is substantial vertical fiscal imbalance between the three spheres of government."

"Essentially, we said we want a better deal from the Commonwealth in the form of revenue sharing because at present Local Government is seriously disadvantaged" President Black said.

"The Territory and Commonwealth Governments, want and expect Local Government to do more of their functions yet they often do not give the necessary resources to do them."

"This has to change because the Committee has, as part of its deliberations, identified deficiencies in Local Government's revenue base relative to its roles and responsibilities" he said.

President Black said "Cost-shifting has contributed to this problem and one way to do something about it is to give Local Government a fixed share of taxation revenue which is based on growth of the economy, not simply CPI and population as is currently the case."

"Other actions the LGAs considered necessary and were pointed out to the Committee include giving proper recognition to Local Government as a legitimate sphere of Government in Australia" President Black said.

"Other spheres of Government sometimes do not give this matter the attention it deserves. We are legitimate, we have to be taken seriously and we should not simply be considered as the next in line to flick pass responsibility to" President Black said.

"We gave the Committee some clues for recommendations, we can only hope now that they will appear in its report along with many other suggestions given by Local Governments throughout Australia" President Black said.

End

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