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Let us stand together on grant funding

Friday 17 August 2018

The maxim of “divide and conquer” has been around since at least the time of the Roman emperors. It remains a political staple. Simply put, working to break up a large group with a single purpose into several smaller groups with different purposes has proven to be a sure way of retaining political and policy control.

That’s worth keeping in mind as we edge closer and closer to the next federal election. If recent experience is any guide, this poll will be decided not on the broad national stage but in the local streets and shopping centres of regional communities. Micro-campaigns will be the rule. Now, more than ever, all politics is local (to quote another well-known maxim).

 

For local councils, this provides an opportunity…and a threat. The opportunity lies in the fact that the issues that matter to local councils will also be the issues the major political parties will seek to influence. The threat? Well, the same fact, actually.

Let me explain.

The major policy change local government will be seeking at the election is one familiar to all member councils. It is past time that all parties contesting the election recognise that the level of financial assistance grants (FAGs) being directed to local communities is punishingly low and should be restored to at least double what it is now.

There is a raft of other worthy proposals on which to campaign, of course, but topping the list should be a call for funds distributed under FAGs to be at least equal to 1 percent of total Commonwealth taxation revenue.

It should be a compelling political message to candidates seeking election: these grants help pay for the libraries, the roads, the parks and the local services that are central to the way communities develop and thrive. So, imagine how those communities would appreciate a doubling of these grants.

You can make the economic case and suggest that local government collects just 3 percent of all taxation revenue in Australia and financial assistance grants go some way to addressing this vertical fiscal imbalance.

But how about the political case: Canberra has an obligation to help support ALL local communities and at the moment that support is simply not good enough.

It is not as if pushing for at least 1 percent of Commonwealth tax revenue is a random ask. That is what local councils received more than 20 years ago. Since then, successive Federal governments have seen fit to gradually reduce their support for local communities through these grants, until today when the funding under FAGs amounts to just 0.55 percent of total Commonwealth taxation.

The result is that all communities are losing out and no one but the Federal government is responsible. 

I emphasise “all communities” because this is where the divide and conquer tactics come in.

There has been some recent agitation surrounding the distribution of FAGs and whether large urban councils, with their big rates bases, strong population growth and greater capacity to fund infrastructure and services, should continue to receive the level of funding support they do from Canberra.

The argument goes that if the larger councils stopped receiving the minimum grant, smaller rural councils would benefit from a larger share of the pie. I hear even one or two senior Ministers have recently lent a sympathetic ear to such a proposal.

Let’s be clear on this. Encouraging a fight over who is entitled to which share of the funding pie draws attention away from the pie’s ever diminishing size. And who benefits from such a fight? Not councils, that’s for sure.

You only have to look at how the pie is carved up now. When you look at the untied portion of FAGs being distributed this financial year, Queensland councils with populations of fewer than 5000 will receive an average of $1934 per resident. Those with populations of between 5000 and 20,000 get an average of $421 per resident. By contrast, councils with populations of more than 50,000 received about $26 per resident from the same pool of funds.

In fact, over the six years to July 2017, the proportion of untied grants from the FAGs pool that went to urban councils in Queensland slumped, while the proportion dedicated to smaller councils rose.

Over the next week or so, your council will receive a letter from Australian Local Government Association President David O’Loughlin to get behind a nation wide push by councils for the funds distributed under Financial Assistance Grants to increase to at least 1 percent of total Commonwealth taxation revenue.

That is all about increasing the size of the pie rather than squabbling over who gets what piece.

I urge you to support that campaign and ignore recent attempts to “divide and conquer”. Let’s stand together on this. Our communities, all of them, will be the winners.

Finally, I am sad to report that we lost a shining light of the LGAQ family last week. Project manager for LG Sherlock Ryan Goff was killed in a traffic accident on 10 August. It’s been a tough time for us all here at Local Government House. We are a tight crew. But the support and friendship Ryan’s work colleagues have shown for each other this week has lightened the load just a little.

Vale Ryan.

Local Government Association of Queensland
LG House, 25 Evelyn Street, Newstead Qld 4006

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