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Election2019 Blog

by LGAQ Media Executive, Craig Johnstone by LGAQ Media Executive, Craig Johnstone

Candidates beware: mayors are not happy

With the election date set and the major parties already reciting their focus group tested lines about economic management (Scott Morrison) and leadership stability (Bill Shorten), the grand narrative of this campaign is being played out on the national stage. But, for voters, the big picture need not be drawn on a national scale. In fact, the more successful a candidate can be at convincing voters he or she is looking after their local interest, the more likely they will emerge victorious on 18 May. 

This is why it is in the parties’ interests to take notice of what peak bodies like the Local Government Association of Queensland is saying about this campaign. The LGAQ has a seven-point policy plan it will challenge the parties to respond to before the election. How the parties respond, along with their wider policies and funding commitments, will draw a picture about the extent to which whoever wins government on 18 May will unlock local community potential. And that’s a pretty big picture for many.

Among the LGAQ’s asks is for the parties to commit to proper grant funding for local governments. The proportion of grants flowing to councils from Canberra used to amount to 2 percent of total Commonwealth taxation revenue. It now stands at 0.55 percent, meaning local communities are missing out on a chunk of funds that they had previously used to build and maintain roads, libraries and parks. This at a time when many councils are being expected to shoulder more of the burden of providing services that should be with the remit of the states or Canberra. Think paying for teachers so that rural schools can remote open, or nurses so hospitals can continue to look after community health. For some councils, particularly the indigenous communities on Cape York and elsewhere in the state, these grants are the ONLY source of funding they have.

 

The response of the major parties to the proposal to restore financial grants has ranged from flat out refusal to barely disguised disinterest. But more than 60 percent of Queensland’s councils have gone to the trouble of passing formal resolutions in favour of restoring these grants to a meaningful level. That’s a lot of mayors to have off side. They are unlikely to stay politely quiet about the issue in the next five weeks of the election campaign. That spells potential trouble for candidates in marginal seats, especially for those with mayors who have a loyal community following.  Those hoping to win the day on 18 May will be reminded regularly that councils in Queensland employ 40,000 people and manage public assets worth more than $150 billion, and are headed by mayors, all popularly elected by their communities, who are not happy with the current financial treatment being meted out by Canberra.  

Watch this space…

Electric vehicle boogaloo on fuel excise

Opposition Leader Bill Shorten’s promise of a target of electric vehicles to comprise 50 percent of all new sales in Australia by 2030 touched off a heated, and sometimes silly, debate, much of which centred on whether such a policy could be achievable without dramatic changes in the way the nation gets around.

The febrile atmosphere of an election campaign (still unofficial at this stage) is not that ideal for a constructive debate on the implications of such a policy. But while the two major parties are going at each other hammer and tongs about the virtues or pitfalls of encouraging such a big increase in electric vehicles in such a short time, neither of them is keen to get involved in what it means for the future of road funding in Australia.

For a sector like local government, which will go into this campaign demanding that a minimum of $800 million a year be spent on the successful Roads to Recovery program, these things matter a lot.

Whatever the pros and cons of electric vehicles, they cannot be relied on as a future source of revenue to improve and maintain the nation’s road network, at least under current regulations.  While not nearly enough of the revenue from federal fuel excise levied on fossil fuel powered vehicles goes back into roads, it does shoulder a lot of this burden.

The problem is that fuel excise revenue is falling already, even without a troublesome rise in electric-powered vehicles. A recent Senate committee investigation into electric vehicles heard that fuel excise had fallen from 1.6 percent of GDP in 2001-02 to just 1 percent in 2016-17.

Infrastructure Partnerships Australia chief executive Adrian Dwyer told the committee that more electric vehicles would “drive a rapid and terminal decline in the major funding base for Australia's road network”.

“In short, revenue is going down while consumption is going up. This is the exact opposite of a good funding model. While fuel excise is not directly hypothecated, it's clear that a declining revenue base will not support the investment required to meet increasing demand for our road networks,” he said. 

What is clear is that, unless regulations and funding sources change, a big fleet of electric vehicles would make repeats of the Morrison Government’s big announcement on road safety funding last month increasingly difficult to accomplish. 

What to do?

There have been attempts to try and head off a collapse in fuel excise revenue caused by any rapid take up of electric vehicles. These have usually involved the introduction of a road user charge to replace the funds lost through a drop in the use of fuel.

Interestingly, the Australian Financial Review reported this week that the Government recently decided to scrap moves to impose a road user charge on electric vehicles to avoid any risk of political backlash.

While the major parties are unlikely to relish such a debate during this election campaign, it is one that will not go away, whether or not voters buy into an electric vehicle bonanza.

 

Rebuilding smarter after disasters

Among public agencies in Australia, the Productivity Commission’s reputation for integrity and rigour is second to none.

The inquiries it undertakes and the reports it produces are usually a good indicator of where the government of the day will direct its reform efforts.

One subject that the commission recently tackled but has had scant public airing its recommendations on the future of natural disaster funding, particularly when it comes to the concept of mitigation. (report link below)

Why mitigation? Because it could make the difference between spending millions of dollars on tackling disasters or spending tens of billions of dollars.

Time and again in recent decades, the bridges, water plants and other infrastructure destroyed by natural disasters has been rebuilt, only to be destroyed again the next cyclone and flood. Mitigation breaks that cycle because it recognises that, while building stronger, safer infrastructure might be more expensive in the short term, it is a good investment if it stays up and running during and after natural disasters strike.

The commission listed the benefits of an improved approach to disaster mitigation in its 2015 report: improved community safety and resilience, a reduction in damage to property, speedier recovery, and a reduction in overall costs to the national economy.

Despite this, the commission found that spending on mitigation was insignificant when compared with the huge amount spent on relief and recovery from disasters. For the Federal Government, the commission reported that mitigation spending amounted to just 3 percent of what it spent post-disaster in recent years.

The Commission urged the Federal Government to ensure mitigation funding to the states be increased to $200 million per year, matched by the states.

Importantly, it said: “Projects should not be limited to ‘hard’ mitigation like flood levees. ‘Soft’ mitigation, like community education and other preparedness measures, can yield significant benefits over time where it modifies behaviour and results in the avoidance of disaster risk”.

This is why the LGAQ is pushing for a proper commitment to disaster mitigation from all parties contesting this election.

 

Indigenous housing deserves debate

There will be a lot of words spoken and a myriad of issues debated during this election campaign but one policy challenge that may struggle to gain attention is indigenous housing.  This is despite the proven success to be had if you get the policy settings right, particularly in relation to meeting the targets regarding Closing the Gap on indigenous disadvantage.

Since the Federal Government opted to let the National Partnership on Remote Indigenous Housing (NPRH) agreement expire on 30 June last year, indigenous communities on Cape York and elsewhere have had to live with the uncertainty of not having a dedicated program to reduce overcrowding.

 

This at a time when proper housing is recognised as a critical building block to Closing the Gap. Not having a program to replace NPRH risks seeing overcrowding tick up again, with lasting impacts on Indigenous health, education and community safety. And another thing: there were 850 local jobs and apprenticeships created under the previous program, which also served to stimulate local businesses and suppliers in regional urban centres in Queensland.

The Commonwealth Government’s own independent report on the review of NPRH highlights Queensland’s achievements and recommends continued long-term Commonwealth funding to maintain houses and respond to overcrowding and growth.

Over the past 10 years in Queensland alone, overcrowding in remote indigenous communities has dropped by almost half. Almost 1,150 homes, a further 1,500 refurbishments and maintenance for almost 4,300 houses has been delivered. But it’s not just the houses. The program also helped build the capacity of Aboriginal and Torres Strait Islander Councils, who with Indigenous businesses now deliver over 80 percent of housing construction and repairs in these communities.

Outgoing Indigenous Affairs Minister Nigel Scullion has resisted all entreaties to find a replacement for the expired partnership agreement and accuses the Queensland Government of failing its responsibilities for housing.

Federal Labor has joined the criticism of Senator Scullion but is silent on what it would do to resolve the issue if it wins government.

The frustration of the local communities is being expressed loud and clear.

The LGAQ’s federal election policy plan cites indigenous housing as one of seven top priority issues that need to be addressed during this campaign. The funding ask is significant, a minimum of $5.5 billion nationally over the next decade, but a far greater price would be paid if our major parties walked away from these communities.

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