The next two state elections, Tasmania this weekend and South Australia on St Patrick's Day, March 17, pose specific threats to local government.
In Tasmania it involves control of the water and sewage utility and in South Australia the policy of the Opposition to introduce rate capping if elected.
Tasmania is unique in Australia in that its 29 Local Governments own and operate the state’s water and sewage utility. TasWater is an amalgamation of three previous water authorities.
The State Government previously passed legislation in the Lower House to take over TasWater, but the move was blocked in the Upper House in November by 10 votes to 4.
Two assessments of the State Government's plan, by the Productivity Commission and a Legislative Council Select Committee, have failed to support it. Further the Tasmanian Audit Office found that TasWater had substantially met the expectations articulated by the Tasmanian Parliament when it was first formed.
Though LGAT President, Mayor Chipman, said the takeover issue has not had a high profile in the election campaign, it was taken to the campaign as Liberal Party policy in the hope that if elected they can claim a mandate to impose the takeover. Mayor Chipman, who was once Tasmanian State President of the Liberal Party, has campaigned against the move, including running against the government in a recent by-election, and says he will continue to oppose it after the election, whatever the result.
He said “nobody can see the justification” for the move, the business case has not been made and councils would not only lose financially, their ability to provide future services to their communities would be impaired. Though Tasmania is unique in this arrangement, it is something that should be of interest to all in Local Government. It involves a State Government attempting to seize an asset which has been effectively administered by Local Government. It's not cost shifting, it’s worse, it’s revenue shifting.
By contrast the big issue for Local Government in South Australia is rate capping. The State Opposition is going to the election with a policy to introduce rate capping and establish an independent regulator to set rate rises. This would take crucial financial decision-making out of the hands of people who have been elected by locals and place it under the control of people who have no responsibility to the communities councils serve. Unelected, and likely faceless people, dictating to lawfully elected community representatives.
The Local Government Association of South Australia has a detailed outline of its opposition to rate capping on its website, which points out that "only two states in Australia have rate-capping; New South Wales and Victoria. There is considerable evidence in NSW, where rate capping has been in place since 1977, to show that rate capping has resulted in loss of council services, in council amalgamations, in significantly higher user fees and charges, and in decaying infrastructure as maintenance levels decline and costs are shifted onto future generations."
Go to the website here for more information and to see how you can become involved in the South Australian campaign against rate capping.
A report by University of New England Professor Brian Dollery, funded by the Local Government Research and Development Scheme, found that rate capping in NSW had led to a decline in the financial sustainability of councils. Professor Dollery said councils with capped rates had higher debt levels and higher fees and charges.
Of great concern is the cascading effect of three states being subjected to rate capping. Will it become the template for all states and the Northern Territory to follow?
ALGA will continue to oppose rate capping on behalf of its members and continues to support Tasmanian Local Government in its efforts to maintain control of TasWater.