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Independent Inquiry Backed

21 December 2004

SA's Local Government Association has confirmed it will move forward with an independent inquiry into the financial sustainability of Local Government.

LGA President, Cr John Legoe said the LGA was even more determined to see an independent inquiry following recent inaccurate reporting by some media.

"The LGA's response package includes Legislative changes, and a range of other mechanisms, but we have decided it is important to have an independent inquiry to look at wider contextual issues," he said.

The inquiry will consider external impacts on Council resources including the fairness of Federal grants, the cost of Council services and infrastructure and possible alternative funding sources.

"Clearly Councils can do more to address the impact on rates of uneven property valuations - particularly for those on fixed incomes," Cr Legoe said.

"It is vitally important that we focus on the real issues and are not distracted by inaccurate reporting repeating myths such as 'windfalls' which are not legally possible under the current Act," he said.

Cr Legoe said the inquiry would also be consistent with a Parliamentary motion moved by independent MP the Hon Bob Such, currently before the House of Assembly, which if passed, will formally ask the LGA to consider and make recommendations about a range of Council issues.

Cr Legoe said that the SA Government was, so far, expressing confidence in the LGA to commission an independent inquiry. "We would like to see the State more involved," he said, "however we have decided we will proceed.

"We are very clear that it will be independent." Cr Legoe said that the Executive Committee had now finalised Terms of Reference for the inquiry and that it be managed by a three member board - hopefully to be appointed in February.

This will be the first time the LGA has commissioned a fully independent inquiry of this type and Cr Legoe said this was a sign of growing maturity of the sector.

Cr Legoe said Councils still struggle to explain that property valuations have nothing to do with total rates income but are only used to distribute rates among ratepayers. He said Councils reassessed and set tax rates every year rather than leaving tax rates the same to reap windfalls as with many other taxes.

Cr Legoe said Council rates could only be raised to balance a Council budget so income was always matched against expenditure programs. Fact Sheets were available on www.lga.sa.gov.au/goto/rates.

For further information contact:
Cr John Legoe, President on 0407 417 314
Ms Wendy Campana, Executive Director on 0417 861 783



INDEPENDENT INQUIRY INTO THE FINANCIAL SUSTAINABILITY OF LOCAL GOVERNMENT IN SOUTH AUSTRALIA


TERMS OF REFERENCE

The independent inquiry is commissioned by the Local Government Association of SA, pursuant to a resolution of the LGA State Executive Committee and mindful of a motion being debated in the SA House of Assembly calling on the LGA to establish such an inquiry (copy appears on next page).

A Financial Sustainability Review Board (FSRB) is appointed by the LGA to conduct the inquiry.

The FSRB is to conduct the inquiry independently from any party or vested interest in particular from the Local Government Association of SA, its member Councils and the Government of SA.

Submissions from the LGA, any of its member Councils or the Government of SA should be assessed in the same way as any other submissions put forward.

The FSRB comprises: (names to be determined and then inserted).

The inquiry is tasked to prepare a report based on the terms of reference below with recommendations for consideration by the Local Government Minister's Forum, the Local Government Association of SA and the State Government and for public (community) debate.

The FSRB will negotiate a budget with the LGA to adequately satisfy the terms of reference of the inquiry. The FSRB will ensure that its report is finalised and presented no later than June 30, 2005 or within 6 months of being appointed whichever is the latter. The FSRB report is to be presented to the Local Government Association of SA and be a public document. The FSRB may establish a reference group to assist it in reporting on the inquiry terms of reference. The FSRB will not be a legal entity but can arrange the procurement of professional services to assist it to complete the inquiry.

In conducting the inquiry the FSRB will ensure that appropriate research is undertaken, including on interstate and international information where relevant, the opportunity to make written submissions is advertised and promoted widely and that public hearings are conducted in both metropolitan and country areas to allow direct interaction with the FSRB. The FSRB is encouraged to prepare a discussion paper addressing each element of the Terms of Reference and consider the benefits of producing a draft report for public comment prior to its finalisation.

Terms of Reference:

The aim of the inquiry is to establish the key issues impacting on the financial sustainability of the Local Government system in SA and the current financial position of Councils in this state. Further it will identify trends and future challenges which may impact negatively or positively on the outlook for the financial sustainability of South Australian Local Government into the future.

The FSRB report will contain any such recommendations it sees appropriate consistent with these terms of reference.


The FSRB will review:

1. Current infrastructure and services provided to communities and maintained by Local Government, including the condition of infrastructure, costs and trends related to such infrastructure and services;

2. Local Government's current financial position including external funding, rates revenue; debt management, fees and fines and other revenue/infrastructure sources including developer responsibilities and trends in these revenue/infrastructure sources;

3. Administration arrangements, costs and trends and measures at a local, regional or state-wide level which may assist in reducing administrative and service provision costs;

4. Examine the relationship between property valuations and rates and any alternative funding/capacity options proposed worthy of future research/consideration;

5. The relevance to SA communities of issues raised in the report of the House of Representatives Standing Committee on Economics, Finance and Public Administration Inquiry into Local Government and Cost Shifting to the Commonwealth Parliament "Rates and Taxes: A Fair Share for Responsible Local Government" (October 2003);

6. Any other such matter as may be relevant to the overall aim of the inquiry.

HON BOB SUCH MOTION:

That this house calls of the Local Government Association to:
(a) consider the desirability or otherwise of changing the number of metropolitan Councils and their configuration, as well as the advantages and disadvantages of maintaining the status quo;
(b) make recommendations as to how Councils can be more efficient and effective in the delivery of services both as individual Councils and through cooperative endeavours;
(c) make recommendations about how changes, including to rates, can be implemented in accordance with equity principles; and consider ways to ameliorate upward pressure on rates and other charges

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