Final public hearing to federal inquiry into local government wraps up

LGA South Australia contributed to the inquiry on behalf of South Australian councils, including through a formal submission and evidence presented at public hearings.

The Inquiry has examined the financial relationship between local government and other levels of government, including the adequacy of current funding arrangements and the long-term financial sustainability of councils.

LGA Chief Executive Officer Victoria MacKirdy said the Federal Inquiry provided an important opportunity for South Australian councils to put their experiences and solutions directly to Parliament.

“We thank the South Australian councils and local government representatives who have contributed their experience, evidence and expertise through this process,” Ms MacKirdy said.

“The Committee has now heard a wealth of evidence about the financial pressures facing councils, from rising service delivery costs to the growing demands of ageing infrastructure, roads, disaster response and climate adaptation.

“Importantly, they have also heard what needs to change to support financial sustainability.”

In late July, the Australian Labor Party endorsed a Federation Compact and voted in favour of recognising the increasingly important role local government plays in supporting communities and committed to meaningfully increase Financial Assistance Grants.

LGA’s submission called for a stronger and more sustainable funding partnership between the Commonwealth and local government, including:

• Financial Assistance Grants to be restored to 1 per cent of Commonwealth taxation revenue
• a review of Financial Assistance Grants indexation to ensure funding better reflects councils’ actual cost pressures
• appropriate funding and resourcing when responsibilities are shifted to local government
• a shift away from short-term, tied and competitive grants towards untied funding.

Ms MacKirdy said the need for reform was becoming increasingly difficult to ignore as councils faced growing costs and responsibilities.

“Nearly three quarters of South Australian council CEOs have identified financial sustainability as the number one risk to the sector.

“At the same time, councils are continuing to deliver the infrastructure and services their communities rely on every day, with rates already making up nearly 70 per cent of council revenue in South Australia.

“We’ve already seen a pragmatic, common-sense approach from the Federal Government, with the May Budget taking initial steps to address South Australia’s long-standing disadvantage in federal road funding.”

“We now await the Committee’s findings and recommendations, and ultimately the Federal Government’s response.”