Academic journal article Australasian Journal of Regional Studies

Regional Development and Local Government: Three Generations of Federal Intervention

Academic journal article Australasian Journal of Regional Studies

Regional Development and Local Government: Three Generations of Federal Intervention

Article excerpt


Contemporary Australian local government is beset by a number of difficult problems. Three distinct constellations of economic and political forces seem to have led to these problems. Firstly, grinding ongoing nnancial distress has given rise to grave concerns over the financial sustainability of many local authorities, particularly in regional, rural and remote areas of the country. In a path-breaking report, the Commonwealth Grants Commission (CGC 2001, pp. 52-3) identined five chief causes for the financial crisis in Australian local government: (i) 'Devolution'--where a higher tier of government obliges local councils to assume new functions; (u) 'Raising the Bar'--where a higher level of government, through legislative enactments, increases the complexity and/or standard of provision of local government services thus raising costs; (iii) 'Cost Shifting'--where a municipal council provides a service for federal or state government agencies without adequate financial compensation and where a higher tier of government no longer provides an essential service thereby forcing a local authority to accept responsibility; (iv) 'Increased Community Expectations'--where local communities demand improvements to local services or the provision of an entirely new service; and (v) 'Policy Choice' where a given council voluntarily expands or improves services. In addition, local councils are also sometimes partially responsible for their financial problems; for example, in many instances local councils have been reluctant to strike rates and other charges and fees at realistic levels (Johnson, 2003).

As a consequence of these financial pressures, existing service provision arrangements have been maintained only at the cost of depreciating local infrastructure. This has obvious dire long-run implications for local government. In this regard, in its Final Report Rates and Taxes: A Fair Share for Responsible Local Government, the House of Representatives Standing Committee on Economics, Finance and Public Administration (2003a, p. 59) noted that 'there is a signincant infrastructure renewal gap across the country and asset standards are decreasing'.

Secondly, there is ongoing concern by all state and territory government policy makers over the operational efficiency of local authorities, especially small regional and rural councils. The primary policy instrument for addressing this perceived problem has been structural reform, with a strong emphasis on council amalgamations (Vince 1997). During the 1990's, South Australia, Tasmania and Victoria all experienced compulsory consolidation programs and more recently New South Wales and Queensland have also undergone compulsory amalgamation. At the time writing the Northern Territory is poised for drastic structural reorganisation. Only Western Australia has thus far escaped unscathed.

Thirdly, in the past two decades the various enabling acts of the different Australian local government jurisdictions have been amended to give local councils greater latitude in conducting their affairs. This has led to a substantial expansion of the role of local government and growing complexity in its relationships with state and federal governments (Dollery, Wallis and Allan, 2006). In this regard, the National Office of Local Government (NOLG) Annual Report for 2000-01 pointed to the excessively complicated intergovernmental institutions, which involved the Council of Australian Governments, in excess of forty Commonwealth-State Ministerial Councils and fora, the Local Government and Planning Ministers' Council, and numerous other ministerial councils, many of which affect local government (NOLG, 2003, p. 8).

In addition, signincant differences in the functions of the different state local government jurisdictions have widened (Marshall, 2008, pp. 23-27). As a result, state government oversight mechanisms are now dissimilar, which has served to diminish the possibility of a uniform national approach to local government. …

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