Speech to the inaugural summit of the National Growth Areas Alliance

Melbourne

Friday 31 August 2007

Thank you for your invitation to be here today to outline Federal Labor’s strategy for local government and our perspective for growth communities.  I hope that today I will also hear first hand from you about some of the challenges you are facing in our growing regions.

Let me first of all acknowledge that there is a chronic shortfall in funding for infrastructure and facilities in Australia’s communities - and especially in our fast growth corridors. 

When Kevin Rudd was elected leader of the Australian Labor Party he made it clear to the people of Australia that he was determined to fix the Australian Federation. 

In saying this, he acknowledged a serious problem.

That problem is the cost shifting between the three spheres of government and the political blame game that has reached new heights under the Howard Government.

Over the years, the cost shifting and buck passing of the blame game has increased the fiscal burden on local government.

And people are fed up with it.

At no time have we seen any credible response from the Howard Government to the financial pressures that face local government, despite having it all laid out for them as long ago as 2003 by the Hawker Review.

At no time have we seen the Howard Government acknowledge the underlying cause of the growing fiscal burden on local government - the FAGS methodology and indexation.

Instead the Howard Government has provided assistance in the form of direct grants designed to maximise its own political benefit.  

These direct grants are just enough for councils to keep their heads above water: just enough to keep local government grateful and begging for more !

This is not a strategy, and our growing regions deserve better.

Federal Labor has a strategy for local government.  It involves five key elements:

Constitutional Recognition

Ladies and Gentlemen, it’s because Kevin Rudd and Federal Labor is serious about ending the blame game, serious about putting a halt to unfettered cost shifting and buck passing and serious about cooperative federalism that we have announced a time frame for the constitutional recognition of local government.

On Monday I announced that an incoming Rudd Labor Government will consult in our first term with state and territory governments, and representatives of local government, including the Australian Local Government Association, the Council of Capital City Lord Mayors and other stakeholders, on the process for achieving constitutional recognition.

Constitutional recognition will redefine the relationship between Commonwealth, state and local governments and guarantee that communities have an effective local voice in decision making on the issues that affect their lives.

The public policy problems that confront us today can only be solved through cooperative and collaborative partnerships between the three spheres of government. 

Communities need an effective local voice in decision making on the issues that affect their lives, no matter who is in power. 

Constitutional recognition will help achieve that goal, but there is a lot of work ahead of us.  Federal Labor has twice put a proposal for Constitutional recognition to the Australian people.  On the most recent occasion, in 1988, John Howard, as Leader of the Opposition, campaigned against it.

The opponents of Constitutional recognition will again be out in force, dividing communities and creating fear about taxes and levels of government.

Constitutional recognition will allow local government to take its rightful place at the policy table as a full partner in the business of government.  Local government is too important for councils to be treated as the playthings of State governments, to be dismissed or restructured at will or left as the last port of call for struggling communities when other governments abandon their responsibilities. 

I therefore ask for your support in achieving this important Constitutional change.

It is important that local government develop a clear idea of the form of Constitutional recognition that it prefers, and that local government be prepared to campaign with a single voice to build community support for this important initiative.

The history of Constitutional reform in this country suggests that proposals for change have a much greater chance of success if there is bi-partisan support. 

Accordingly, I call on the Liberal and National parties to indicate now that they will support Constitutional recognition for local government, and I ask for your support in asking your local Coalition candidates their indicate their public support for Constitutional recognition.

The Council for Local Government

 Labor understands that Constitutional recognition needs to be supported by structures in which collaboration between all three spheres of government can take place. 

This is why I was so pleased to announce that in our first term of office we will establish a Council of Australian Local Governments. 

A Council of Australian Local Governments will strengthen the dialogue between Federal and local governments on matters that are of common interest to us all, and ensure that local government representatives have a more effective voice at COAG. 

If we are elected to government, I will invite local government bodies including the national and state local government associations, the Council of Capital City Lord Mayors, regional bodies and other stakeholder organisations to nominate representatives for the Council. 

The Council will provide access not just to the local government portfolio, but to portfolios across the Federal government.  It will include a senior economic Minister (such as the Treasurer or the Minister for Finance), the Ministers for Local Government, Regional Development, and Infrastructure and Water, and other Ministers as required.  

One of the tasks for the Council will be to plan for a national referendum on the Constitutional recognition of local government, including the hosting a form of constitutional convention if that’s what agreed by stakeholders.

The Council of Australian Local Governments will meet twice a year to consider a formal agenda of items and it will be serviced by the Prime Minister’s Department, as is COAG.

These biannual meetings will set a timetable for constitutional recognition and build the foundation to move forward on the big issues involved in creating a strong and sustainable future for local government.

Fiscal reform

We believe that one of the first topics of this dialogue will be the need to improve the underlying financial arrangements between our governments.

This cannot wait until after Constitutional recognition.

Federal Labor is committed to finding ways to redress the funding shortfall suffered by local government.

As a first step in meeting that commitment, I will ask the Council of Australian Local Governments to provide advice on the future funding arrangements for local government and on processes for involving federal, state and local government in developing clearer definitions of the roles and responsibilities of local government and other levels of government.

The Infrastructure Challenge

Federal Labor is offering vision and a new approach to address the infrastructure challenge for our high growth areas.  The Howard Government is offering political tricks and the blame game.

In a speech last week the Prime Minister indicated that he would maintain budget surpluses in future years and lock them away (his words, not mine) in a fund so that only the earnings would be available for investment in economic and social infrastructure.

Now, rather than invest his surpluses in the economic and social infrastructure that communities need, John Howard says he will lock the money away and drip feed the interest on his earnings out when and how he chooses.

Make no mistake, this is not the local government infrastructure fund that local government has been pressing for.

John Howard cannot tell us where the money will go, or even whether it will go to local government.

When asked on the ABC’s AM program whether this funding would go to community libraries and sporting facilities, he replied:

"I haven't mentioned those…"

He cannot tell you how much money there is, whether this will be new money, or a recycled version of the money he already spends.  This is just political trickery.  As the former NSW Auditor-General Tony Harris has said,

“The government can safely promise to establish numerous money jars for popular causes and dedicate their future income because ministers know they can cut the normal budgetary allocations to the same causes if circumstances warrant it.”

The Prime Minister cannot guarantee that communities will have a say – that this money will go to communities who need it rather than where he needs the votes.  When asked about where the priorities for spending money would be, he said that:

"we will determine those according to sensible national priorities."

There is no commitment here to the principle of localism or of working with local government to decide where investments will be made.  John Howard won’t say where the money will be spent because he prefers to keep it up his sleeve to fund his own campaign for re-election.

The question that needs to be asked of John Howard is whether the funding will go to areas of genuine need, or whether it will go to the Prime Minister’s area of need in marginal seats?

For 11 long years, John Howard sat on his hands, watched the state of social infrastructure in our communities worsen and waited until 4 weeks out from an election to make a statement about it.

As Laura Tingle said in the Financial Review on 21 August, the agenda the Prime Minister has set is not all that different to anything he has said before, it’s only a general pledge to interfere wherever he likes in the realms of other governments.

The Howard Government wants to keep local government begging so that it will be grateful for any morsels it chooses to drop from the table.

By contrast, a Federal Labor government will drive a dramatic overhaul of infrastructure policy in Australia.

A Federal Labor Government will establish a new statutory authority - Infrastructure Australia.

Infrastructure Australia will be dedicated to infrastructure reform, planning, development and investment and be charged with the development of a strategic blueprint for our nation's infrastructure needs.

It will be established within 100 days of the election of a Rudd Labor Government.

We will overhaul Australia’s infrastructure environment and ensure we have world class infrastructure for the future. 

But we will do this in partnership with local government.

Through the Council of Australian Local Governments,  local councils will have an opportunity to make a real contribution to the formulation of a national program for infrastructure renewal and development.

Specific policy initiatives

Labor has already announced a number of specific initiatives that will benefit fast growth areas.

These commitments include:

In addition to these initiatives, Labor’s $500m Housing Affordability Fund will assist up to 50,000 new home buyers across Australia over the next five years.

It will form the basis of a new partnership between the Commonwealth and local governments to tackle housing affordability.

Under Labor’s plan, local governments will apply through a competitive process for grants to cover some of the cost of new housing infrastructure.

The Housing Affordability package will help address the pressure on local councils in providing new infrastructure such as water, sewerage, transport, and community facilities related to new housing developments.

As a final example of how Labor is by working with local councils to bridge the funding gap left us by the Howard Government and meet the needs of local communities, I would point to the announcements last week on New Directions for Australia’s Health by my colleague Nicola Roxon, Labor’s Shadow Minister for Health.

As part of a $2 billion Health and Hospitals Reform Plan, a Rudd Labor Government will invest $220 million to establish GP Super Clinics in local communities.

The GP Super Clinics seek to meet a need in many of our regional and fast growing urban areas for easier access to GPs and other health professionals.

Labor's GP Super Clinics will provide infrastructure for GPs and other health professionals to work together in the one place, providing a greater range of quality services in local communities – and much greater convenience for patients.

Federal Labor will provide leadership and funding to deliver the services, but will work in partnership with other spheres of government and local communities on where the clinics will be located and the exact configuration of services.

The GP Super Clinics will represent community based solutions for better service delivery and the exact configuration of services will depend on the needs of the local community. Local involvement from health professionals through to councils and area consultative committees will be encouraged. Tenders to build and run the GP Super Clinics will be open to local consortiums, including local councils, existing practices looking to amalgamate, health professionals and Divisions of General Practice. Tenderers will be required to seek input from local health professionals.

Labor’s GP Super Clinics will help to deliver more frontline health services in local communities – they will help get doctors and other health professionals into areas that need them most, particularly in regional areas and fast growing outer suburbs that tend to be under serviced by health professionals.

These initiatives alone won’t remove the funding gap for councils in fast growth areas, but they will go some way to alleviate the pressures while we work through the issues relating to local government financing.

Labor is committed to localism and committed to working with local government to deliver services that communities need.  This means a real relationship, collaboration between the three spheres of government and forward thinking. Not the short sighted election year blame game politics of a tired Coalition government.

Thank you for the opportunity to be here with you today.

Together we can do better. 

I look forward to hearing more from you about how we can work together to build better communities in Australia’s growth areas and I welcome your questions.

Thank you.

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