President’s column

WHILST THE nature of the Commonwealth is about how we share a common founding as nations, and common institutional frameworks, there is a great deal of difference between us – as I am discovering at the Commonwealth Local Government Association conference in Malta.

The largest differences go to the core of our independence as a level of government. Many countries operate as unitary governments, with their national government providing all the laws that establish and direct Local Government. Others, like Australia, have a federal system, where this power was established at the sub-national level, in our case the state and territory governments, and not ceded to the national government upon its formation.

Secondly, the degree of independence is also related to the ability for Local Government to raise revenue in its own right. Some receive 99 per cent of the revenue from their national or central governments, which exercise a great deal of control over how it is spent. Others have independent taxes, and the ability to spend it as they determine at the local level.

Where funds are provided centrally, the high degree of control limits the ability of councils to address some of their identified local needs. Some countries also have to endure having their council staff being selected or supplied by the central government, with limited capacity-building in place to change this dynamic.

Grant funding also differs markedly. In New Zealand, national road funding grants are only available upon application and after a thorough business case approach. This competitive process limits the ability for councils to identify and address issues important to their local communities, unless the national government agrees.

In Australia, we not only benefit from the ability to raise and spend revenue with relative freedom, we receive the vast majority of our federal assistance untied, meaning we can spend it as we wish. Whilst we seek to protect this as a “right”, we should keep in mind this is at the ultimate discretion of the Commonwealth and state governments of the day.

We should take care to ensure our ability to receive untied grants is not lost for want of us explaining what we do with it and why it is important for it to be untied.

As the recent indexation freeze proved, we should not assume this arrangement will exist forever, or take it for granted. We should instead recognise that before the 1970s it did not exist at all, and it does not exist in most Commonwealth countries.

In previous articles I have challenged you, and the sector more generally, to engage with your local parliamentarians to share the great work your council does with the funds you receive through Financial Assistance Grants, untied road grants, R2R, Black Spot funding, BBRF, or other funds you access.

Are we also sharing this story with our communities? Are we honest and transparent about how Commonwealth and State funds form a vital component of our revenue stream?

If we are transparent, and don't gloss over these funds as an entitlement, we will be more successful at engaging our locals in fighting for their retention, or restoration, should the need arise.

What the conference in Malta is revealing is that Australia’s revenue-raising legislation and funding relationship with other levels of government provides a high degree of security and freedom relative to many other Commonwealth nations – but let's not take it for granted!