ALGA has welcomed the new Infrastructure Policy Statement released by the Australian Government today, while highlighting more needs to be done to address the growing need for local government infrastructure as cost of living pressures bite.
ALGA President Councillor Linda Scott said it was disappointing to see the new framework prioritises funding for nationally significant infrastructure projects with Government contributions of at least $250 million.
“Recent SGS Economics research highlighted local government can be part of the solution to increasing Australia’s productivity through increased investment in key infrastructure, workforce, technology, and climate change adaption,” Cr Scott said.
“New research published by the Grattan Institute this week found taxpayers would receive better value for money if the Government pivoted from funding ‘megaprojects’ to improving our local community infrastructure needs, such as roads.
“This research also highlighted the urgent need for the Government to inject $1 billion per year into local government infrastructure across the country.
“Without increased local government infrastructure funding, the Government risks putting a handbrake on our national productivity.
“We welcome Minister King’s commitment to improving productivity, liveability and sustainability through infrastructure spending, but she must explain how her review will result in increased local government infrastructure funding, not cuts.”
Research undertaken by SGS Economics found that over the past decade, total expenditure per capita by local government has more or less flatlined, despite a period of rapid population growth and escalating demand for volume, quality and reliability in public services. Meanwhile, outlays per capita by the Commonwealth have escalated sharply, and those of state and territory governments have grown steadily.
By international standards, investment in Australian local governments is small, forcing councils to operate with very modest resources, according to SGS Economics. Allowing for the differing scope of local government across nations, Australian local governments’ share of GDP ranks amongst the very lowest of comparator nations.
“As cost of living pressures increase, local government infrastructure to support our communities is increasingly stretched,” Cr Scott said.
“Our local government libraries provide spaces to access online learning, our pools provide support to communities learning to swim or coping with record heat waves, and our aged care and early education care centres allow working families to continue to care for loved ones whilst earning a living.
“Currently, not one of our 537 Australian local governments is able to provide a $250 million co-commitment for a single infrastructure project. Local governments call on Minister King to explain how the Federal Government will partner with us to improve the resilience, safety and productivity of our local infrastructure and see funding for local governments and our local communities increase in this review.”
The Grattan Institute’s Potholes and pitfalls: How to fix local roads report recommends increasing federal Financial Assistance Grants to councils by $600 million per year, and Roads to Recovery funding by $400 million per year.
The report also calls for a new $200 million per year fund to assess and upgrade local roads identified as priority freight routes.
SGS Economics found that even though local government-controlled infrastructure has large productive impacts on the wider economy, local governments have been doing more with less, compared to other levels of government. If provided with adequate funding local governments could contribute even more to national productivity.