Book Launch – Local Government Sustainability

A book just launched at the University of New England could not be any more timely or topical, with local councils facing infrastructure renewal backlogs that they cannot afford and many having recently been described as less than sustainable. The Federation Press published “Funding the Future – Financial Sustainability and Infrastructure Finance in Australian Local Government” was co-authored by Professor Brian Dollery, Dr Michael Kortt and Dr Bligh Grant, of the Centre for Local Government at UNE. Member for Northern Tablelands, Adam Marshall officially launched the new resource.

“This is a very important book,” Mr Marshall said. “It accurately and comprehensively encapsulates the plight of local government, nationally. It also looks at constructive ways to address the financial sustainability issues confronting our councils, as highlighted by the infrastructure backlog in NSW.”

“It’s great that the expertise for this book has come from regional universities because regional councils struggle with infrastructure cost burdens more starkly.”

Professor Brian Dollery said the book does not merely look at finance issues in councils. “We look at potential solutions. We assessed various proposals for dealing with endemic infrastructure backlogs and came up with our own proposal,” he said. “We present a case for a National Local Government Finance Authority. This authority would be guaranteed through Federal Government backing. It would be financed through the sale of bonds, loans from superannuation funds and the corporate sector. Interest on loans from this authority would be lower than bank financing. The cost burden of infrastructure renewal can be spread, cost-effectively, through time.”



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Beattie is back to waste your money again!

In 2007, Peter Beattie’s Queensland state Labor government demanded that the number of the state’s local authorities be reduced from 156 to 72, claiming that Treasury had found that a number of small councils, particularly in rural areas, were financially weak and unsustainable.

It was argued at the time that amalgamating local authorities into super-councils would streamline services and operations, lead to greater efficiencies and ultimately result in overall cost savings for ratepayers.

However, many Queenslanders, who formed action groups and rallied public support against the amalgamations, strenuously resisted the Beattie government’s policy.

Premier Beattie threatened any council with instant dismissal if it held a referendum on the issue. The Howard federal government allowed referenda to be held, which resulted in resounding votes against amalgamation. Beattie pressed on regardless.

Liberal National Party (LNP) members used the Queensland public’s disenchantment with the issue to shore up their support in rural and regional areas. Before the March 2012 state election, they promised to reverse the amalgamations if elected to government.

However, on coming to power, the Campbell Newman’s LNP government settled for a far more limited rollback and subsequently, only four shires are now enjoying a return to their former boundaries.

Many other local areas have been denied that opportunity and now face increasing rates and lowered services.

The case for de-amalgamation is based on good fiscal sense.

Robert L. Bish is professor emeritus at the University of Victoria (British Columbia, Canada). He was co-director of the Local Government Institute from its establishment in 1995 until 2002. In 2001, he produced a research paper on local government amalgamations for Toronto’s conservative C.D. Howe Institute. His study concluded, “forced amalgamations are the product of flawed nineteenth-century thinking and a bureaucratic desire for centralised control”.

Professor Bish argued that the inflated municipal authorities resulting from amalgamations were unsuitable to the need for society to adapt readily to rapid change. Moreover, establishing super-councils would not lead to cost efficiencies, but rather to cost increases, inferior service and less accountability, as ratepayers became increasingly distanced from local authority.

In Qld recently, the Queensland Treasury Corporation has released details of its Audit into Whitsunday Regional Council and have found that it is in debt to the tune of 87 million dollars.

The QTC said that Whitsunday Council would have gone broke last month if it had not been provided $20M in emergency funding from the Queensland Government.

Mayor Whitney told ABC Tropical that Council were looking at selling off assets to help repay its debts; “We have some vacant land, we have caravan parks….” many believe that the sale of Proserpine Airport may be back on the agenda.

Water and Sewage charges are to also rise by 9%.

Whitsunday Council’s debt would be incurring interest charges of around $4,732,800/year at 5.44%, which is $323.93 per year for every household.

Whitsunday Council’s Debt equals:

$2,481.11 for every man, woman & child living in the Whitsundays; $5,954.66 for every household; that is 9%-10% of what every household in the Whitsundays will earn as a wage/salary this year.

Academics such as Professor Brian Dollery of UNE, can confirm that no council amalgamation has ever resulted in cost savings – however the reverse has been the case in every instance.

This is what Mr. Beattie has done to Qld in the name of creating more efficiency and greater economy! Now he seeks election in Forde and who knows where his centralist philosophy will take us if he succeeds.

I doubt whether the people of Forde will be fooled by his doublespeak however just in case this may just serve as a timely warning.