Bills

Local Government (Boundary Adjustment) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 15 February 2017.)

The Hon. A. PICCOLO (Light) (17:13): I would like to make a brief contribution to support the Local Government (Boundary Adjustment) Amendment Bill 2016. The bill is a move in the right direction, and I understand that, importantly, it is supported by the LGA and councils generally across the state. This bill looks at opportunities for councils to alter their boundaries, and it frees up the existing system, the existing act, which is quite restrictive. The reality is that very little reform of boundaries has taken place because it requires a whole range of people to agree to it, and invariably that has not occurred.

In my own local area, I am on record over many years as suggesting that the boundaries of the Town of Gawler, which I had an interest in previously, should be allowed to be modified to incorporate parts of the Light Regional Council and also the Barossa Council. That is nothing new; I have been saying that since I was on the council many years ago, but the existing legal framework prevents that from occurring. We need a system that encourages councils to review that but also provides some certainty.

The arrangement of council boundaries in South Australia has varied since the mid-19^th century, often reflecting changes both in the roles played by councils and the public's expectations. Just to give you an idea, when I first entered council, I think there were 162 or 164 councils. I know it is some time since I entered council in 1981; maybe 140 councils might be a closer figure. I cannot remember the exact figure, but there were over twice as many councils as there are today.

For example, I started my life in the district council of Munno Para. When you look at the history of that council, it changed. In fact, at one stage the district council of Munno Para's offices were actually in the Town of Gawler's council area. There is a whole range of other anomalies which indicate that over time communities have grown in different ways and the boundaries have not kept up. The essence of this bill is about ensuring that council boundaries reflect those community boundaries. That is very important. That is important from a planning point of view, in other words planning for your community. That includes things like physical planning, and also transport corridors, transport routes and planning for delivery of services. This bill will enable that to happen.

Over those years, a number of smaller councils have been aggregated, but there has also been a continuing appetite for communities to participate in local decision-making. I give Gawler again as an example. The Gawler council originally was just between the two rivers. There was a Gawler South council. In fact, for people who know the racecourse, the racecourse was actually surrounded by the district council of Munno Para when I was first elected, only the racecourse itself was in the Gawler council. In fact, the Vadoulis nursery, which is a huge icon in Gawler, was part of the district council of Munno Para.

Gawler West was in the district council of Light, and Light was actually the result of a merger between the district council of Mudla Wirra and the district council of Freeling. I know the member for Goyder used to be the CEO of a council. I am sure he has served on some councils that were previously a number of other councils, and he became the CEO of the merged councils. I think that was in the Mid North, where he became CEO of one of the federations, which was four councils, which became two councils, and the two then federated. I do not recall how successful that was.

Mr Griffiths interjecting:

The Hon. A. PICCOLO: Of course, it was successful; the member for Goyder was the CEO. I think that is what he is trying to tell me. I remember having a discussion with him some years ago when I was interested in the federation model. I think I wrote to him at the time seeking some advice on how it went; that is by the bye. Communities have changed, not only in a geographic sense, but technology has changed. That is a very important factor. You do not have to go into your council offices to use a whole range of services these days. You can go online and lodge applications, pay bills, etc.

The last period of significant amalgamation of councils occurred in the late 1990s. I am also advised that the last full council amalgamation was the merger of the corporation of Naracoorte, the district council of Naracoorte and the district council of Lucindale to form the Naracoorte Lucindale Council. That was some time ago as well.

It should not be amalgamation for the sake of amalgamation either. I think boundaries need to be changed to make sure we have the best possible opportunities for communities to engage with their local government authority, to provide the best use of limited resources in that community and also to ensure that the boundaries reflect an opportunity for those communities to plan effectively.

In the case of Gawler, for example, I am not talking out of school when I say that most people think Hewett is part of the Gawler community. Certainly, people think they are part of Gawler. I recall when I was the mayor of Gawler, I was once invited to a function in Hewett. I was talking to the organisers and I said, 'Your mayor can't make it today? They said to me, 'Aren't you our mayor?' I said, 'No, I'm not. The mayor is the Light Regional Council mayor.' That is how people identify in those communities, so clearly the boundaries have not kept up. That is also true for the Barossa: there are parts of the Barossa Council between Light and the Barossa that should change to ensure that the Barossa Council reflects the true Barossa region.

Mr Knoll: You're a brave man for saying it, Tony.

The Hon. A. PICCOLO: I said it 20 or 30 years ago. It was true then, and it is still true today. When you talk to people one to one, they see the sense of it, but sometimes local politics gets in the way. I would go so far as to say that in my region—if you include the Barossa region in terms of a state administrative area, which includes the Town of Gawler, the Barossa Council, the Light Regional Council, and the Mallala council—I think there is room for change.

It would be silly to say there is no room for change. You could still have a strong rural council, but some of those more rural living areas and those urban areas should become parts of other council areas, and they are much better managed. Importantly, this proposal puts it in the hands of local government and an independent commission. It is not for us to decide: it will be decided at the local level, which is very important.

The voluntary approach is in contrast to the more directive approach, and this bill is about a voluntary approach. Other jurisdictions, for example, Victoria (under the Kennett government) and also Queensland, to some extent, had forced amalgamations. More recently, former premier Baird decided on the voluntary merger of some councils, which I think was part of the reason he lost some favour in his state. So, this is actually a very good model.

The government is opposed to forcing councils to amalgamate simply on the basis of the belief that fewer councils mean better local government. I would like to reinforce that. In itself, there should not be amalgamation for the sake of amalgamation. It should deliver tangible benefits to the community. In that regard, I am reminded of a report, which was prepared some time ago by the Australian Centre of Excellence for Local Government, the Local Government Association of South Australia, and Local Government New Zealand. It is called 'Consolidation in local government: a fresh look', and it goes back to May 2011.

Some of the findings in that report are very interesting. One of the key questions often talked about regarding amalgamation is: does it deliver cheaper rates? The short answer is: not necessarily. It does not necessarily deliver cheaper rates because what often happens is that the new entities use those savings to run a whole range of other improved community services.

One of the key improvements of having larger councils and appropriate boundaries—and this is what the report found—is that it gives those local government authorities the capacity to do a lot more; it gives them the capacity to hire better staff; and it gives them the capacity, for example, to borrow more and do more. That is the most important thing: the bigger rate base enables those councils to do a lot more. Often, the very small councils are effectively doing maintenance work—just maintaining things. Those bigger councils do a lot of capital works and projects.

Referring to the conclusions, apart from those I have mentioned, in terms of efficiency and economy of scale, the report stated that there was a strong link between efficiencies and economies of scale. In other words, the slightly bigger councils lead to greater economies of scale, and a shared services model also improves efficiencies and economies of scale. The report found that there was a very weak link in regional collaboration. Regional collaboration did not deliver the same economies of scale as amalgamation or shared services.

In relation to the strategic capacity—the capacity of the council to do a lot more—this independent report prepared some years ago found that there was a very strong link for amalgamation. Again, regional collaboration is a weak link, shared services has the potential for some link, but amalgamation delivered better outcomes in terms of the councils' capacities.

In terms of service improvement and innovation, this is also linked to strategic capacity. There is a very strong link between amalgamation and service improvement and innovation because those councils have the capacity to do new things and deliver more services, and they build the capacity to innovate. That is not to say that small councils are not innovative, but their capacity to deliver on a bigger scale is limited. Again, they found there were some potential improvements in regional collaboration but not as much as if there were amalgamation.

One of the things about bigger councils—and you have to acknowledge this—is the potential risk of less community participation, less involvement by voters and electors in the community. If you were to look just at sheer involvement in elections as an indicator, those smaller councils do have a higher voter turnout than the large councils. That is partly because of size, but it could also be because those councils are more rural and not urban, metropolitan councils, and there has always been a higher level of participation in local government in country areas. However, the report says that that is a risk that can also be managed through appropriate policies and practices.

This bill goes a long way to enabling those sorts of boundary changes to take place and also enabling those councils that believe things could be improved in regions to take place. The critical factor in deciding whether council boundaries ought to be changed or amalgamated is the issue of how communities can be best served. This is an issue that deserves attention and debate, and that simply has not happened in a formal, constructive manner for nearly 20 years.

The legislative provisions guiding council boundary changes have not been altered since the Local Government Act 1999 came into operation. The Boundary Adjustment Facilitation Panel was originally intended to be an interim body that could make refinements following the significant amalgamations of the 1990s—and I must acknowledge that was during the Liberal government, either the Brown or the subsequent government—although it had continued until being abolished as part of the review of boards and committees in 2015. There has been little in the way of significant council boundary changes during that period. That is not to say the panel has not done its job, but it had a very narrow charter in what it could do.

The bill is based on work associated with a discussion paper released by the LGA, and I acknowledge that the minister has worked very closely and over a long period of time with the LGA and local government to achieve this result. We should not underestimate how big a result this is. To get the LGA and local government on side to enable this to happen has involved some tough negotiations, I am sure, but also a willingness to look at this. This is a major achievement for the Minister for Local Government but also for the LGA in managing individual councils, because I know that there are people out there who are totally opposed to any change.

The key elements of the bill include:

providing a simpler and broader initiation process, allowing for single council, ministerial, parliamentary or public initiation of submissions for boundary change;

introducing a streamlined assessment pathway for insignificant boundary change proposals;

establishing an independent commission to undertake initial assessment of proposals—which is important to ensure that any proposal should have strong grounds for any proposed changes—and overseeing investigations and making recommendations to the minister; and

providing for an independent analysis of significant boundary change or amalgamation proposals by investigators with expertise relevant to each proposal.

Unfortunately, the current system does not enable that to occur. It is proposed that this legislation come into operation following local government elections, which are scheduled for November 2018. This will allow recently formed councils to consider issues about the nature of council boundaries. It would also enable people who perhaps want a change to run for council, and that would be a good thing. If there are communities who are looking for reform they will be able to vote reform-type candidates into their councils in November 2018.

It is intended that, subject to the bill's passage through parliament, work will be undertaken to prepare the Local Government Grants Commission to take on a new role, to provide advisory expertise and also to assess the proposals, to oversee the council boundary change process. This will include the development of detailed guidelines about the working of the commission, including requirements for transparency and appropriate levels of consultation, which are very important. The local government sector and council employee representatives will participate in the development of commission guidelines.

The bill provides for the commission to recover costs incurred by investigating proposals from the person or body who initiated it. The intention is to encourage the submission of sound proposals and allocation of resources to avoid delays in progressing investigations. I think that is very important.

When I was a member of the Gawler council, just before I became mayor there were proposals under the old 1999 act. I remember that there was a proposal to alter the boundaries of Gawler, Light Regional Council and Barossa. A whole range of different models was proposed. If I remember correctly, close to a million dollars was spent in that region on development proposals and they went nowhere.

This process makes sure that a proposal has some legs before moneys are spent on the detailed assessment and analysis, and I think that is a very wise step. In my own area, council amalgamations of boundaries have not been that successful. Hopefully, when it is passed this bill will incentivise the region to look at that. In the end, there may be some minor changes, but hopefully it will lead to some improvements.

Alternatively, there may be some quite drastic changes to reflect the changes in the demographics of the region over the last 20 years or so. I am aware that the Gawler council has a quite clear policy that it wishes to amend its boundaries to reflect the community boundaries. As I mentioned, that will probably include places like Hewett, parts of Kalbeeba and perhaps even parts of Gawler Belt, which are in the two adjoining councils. However, that is something to be discussed by those communities at the appropriate time.

Hopefully, this proposal will also work through some of those historical anomalies. In the days of the horse and cart and poor telecommunications, boundaries were designed to reflect the limitations of the day. I am also aware that some councils have been agitating for change. I know there are some very progressive councils on Eyre Peninsula, for example, who have been agitating for reform of the act to enable them to explore proposals.

I would not be surprised if some of those Eyre Peninsula councils are some of the first to put up their hands and say, 'We will go through this process,' and that would certainly be a good thing. I think there are eight councils on Eyre Peninsula. Not all eight should join to make one council, but there might be a smaller number than there is now. That would not only build capacity for that region but also address some of the infrastructure and planning issues.

Quite clearly, there are bigger communities of interest than exist now in those council areas. I was quite impressed by the progressive nature of those councils in that region when I visited them. I support this bill and commend both the minister and the Local Government Association for the great work.

The Hon. G.G. BROCK (Frome—Minister for Regional Development, Minister for Local Government) (17:33): I thank members for their contributions to the debate on this bill, particularly those who have focused on the substance of the bill, reforming the council boundary change processes, which is what this bill is about, and for sharing their views and experiences about local circumstances across their local government areas. I would especially like to thank the previous shadow minister, the member for Goyder. He was a great part of this consultation and the communication between my office and the shadow minister was greatly appreciated.

In bringing the debate to a close, I would like to draw members' attention to a couple of government amendments that have been filed to provide further clarity about the workings of the proposed independent commission. The first amendment relates to requiring the commission to prepare and publish guidelines that will explain the process the commission will use in determining costs. The second amendment addresses matters related to the independence of the commission. I anticipate that we will deal with both of these matters in more detail during the committee stage of the bill.

As indicated previously, given the shortcomings of the existing council boundary change process, which has delivered little in terms of significant boundary reform, I was committed to reviewing the process and presenting to parliament an alternative framework that provides for both minor council boundary adjustments and more significant boundary adjustments and structural reform to occur in an efficient way and in a way that promotes the best interests of local communities.

I submit that this bill will provide the framework to deliver the necessary timeliness, efficiency and also expertise required to ensure better outcomes for our communities. I am also aware of the amendments the member for Unley would like considered as part of the debate on this bill as indicated by the contingent notice of motion. In short, apart from seeking to rename the bill I have introduced, the member for Unley's amendments revisit the rate capping mechanism that was included in the member for Goyder's private member's bill which was rejected by this house last year.

Mr KNOLL: Point of order, Deputy Speaker.

The DEPUTY SPEAKER: Yes, member for Schubert.

Mr KNOLL: When I was seeking to make comments about a rate capping amendment on the contingent motion that the member for Unley is seeking to put, I was told that I was not allowed to talk about it, yet the minister is allowed to talk about it in his closing remarks.

The DEPUTY SPEAKER: I ask the minister to come back to the relevance of the closing remarks.

The Hon. G.G. BROCK: I will be guided by the views of the Deputy Speaker. Assuming that the member for Unley does move this motion, I hope that any—

Mr KNOLL: Point of order, Deputy Speaker: the minister is defying your ruling.

The DEPUTY SPEAKER: I think he is probably confused about what it might mean. Perhaps if we just get to the end of the bill.

The Hon. G.G. BROCK: Yes I certainly will. Thank you, member for Schubert. I will close by thanking members for their contributions. I would also like to thank the Local Government Association, the Electoral Commission, the councils and the local government sector as a whole for contributing so much to this bill. Thanks also go to the Office of Local Government, parliamentary counsel and to my staff for their hard work in preparing this legislation.

Bill read a second time.

Mr PISONI (Unley) (17:36): I move:

That it be an instruction to the committee of the whole house that it have power to consider amendments relating to local government rate increases and caps.

The DEPUTY SPEAKER: You can speak to that now. You need to speak to the instruction.

Mr PISONI: I understand that. My understanding is that the standing orders allow me to speak to the narrow points of the motion. The reason for introducing this at this time is to take advantage of the fact that the government is considering what is a significant change to the Local Government Act that does have an impact on cost or on efficiencies in the running of councils in South Australia. My amendments are an extension of those efficiency gains, cost savings and improvements to the Local Government Act that the government is introducing.

The Hon. G.G. BROCK (Frome—Minister for Regional Development, Minister for Local Government) (17:38): The motion is opposed.

The house divided on the motion.

Ayes 16

Noes 20

Majority 4

Motion thus negatived.

Committee Stage

Clause 1.

Progress reported; committee to sit again.