Motions

Rate Capping

Mr GRIFFITHS (Goyder) (11:32): I move:

That this house—

(a) notes the level of local government rate income increases over the past five years;

(b) notes the concerns expressed by the local government sector of transfer of responsibility from the state government to local government and the associated cost impact; and

(c) requests the member for Frome, as Minister for Local Government, confirm what legislative, regulatory or practical action he has pursued, investigated or implemented to keep local government rate increases to a minimum.

I have brought this motion before the parliament in a very serious manner. As the person who proposed the legislation of last year, in which local government rate capping was put before the house and defeated, and as someone who started working in local government on 2 January 1979, has held the local government shadow portfolio and taken an interest in local government matters for 38½ years now by virtue of employment or being a member of this parliament, I have done it in a very serious way.

It is intended to be a discussion about the level of increases over the last five years. It is my intention to put on the record just some of the increases from councils for the 2014-15 year through to, in some cases, the set declaration for this 2017-18 year; I know it is still a draft. I thank the member for Unley and his office for providing me with those updated figures.

It is important also to reflect on an opportunity where councils, by virtue of their advocacy body, the Local Government Association, have expressed concern for some time about the responsibilities transferred to them that they are required to fund, which has come from the state government in the main. Some of that comes from the document that was in for the 2017-18 budget submission for the state budget that the Local Government Association put forward.

The third part of the motion is about the direct question of the action by the member for Frome, as the Minister for Local Government, on what he has done to make a significant difference to the cost of rate impost upon all property owners in South Australia. The areas the motion addresses are a bit varied; however, there are very important areas where I think some responses are needed.

The member for Frome came to me before this motion was able to be put; unfortunately, he is rather unwell with a physical issue today and he has had to get treatment for that. I accept that, but it is unfortunate that the minister cannot be in the chamber to contribute to the debate because I know that was his intention.

I want to read into the record a summary of some of the rate increases from 2014-15 through to this year, projected. They paint a very interesting picture, which comes as a bit of surprise, but it is a picture that pleases me. Some examples are:

Campbelltown City Council in 2014-15 had a 4.5 per cent increase, and this year the adopted figure is 2.6 per cent;

the City of Mitcham had a 4.24 per cent increase in 2014-15, and this year 2.9 per cent is the adopted figure;

the City of Playford had a 5 per cent increase in 2014-15, and this year the adopted figure is 2.8 per cent;

the City of Prospect had a 4.4 per cent increase in 2014-15, and this year it is 2.75 per cent;

the City of Unley had a 4.95 per cent increase in 2014-15, and this year it is 2.9 per cent; and

the Town of Walkerville had a 7 per cent increase in 2014-15, and this year it is 2.68 per cent.

I did not intend to focus just on metropolitan councils—I could read in many more—but they paint a picture that is nearly replicated in most councils and also across regional council areas, where in 2014-15 the rate increase was a higher figure than it is for the 2017-18 year. I honestly think the Liberal Party can be held partially responsible for that good result. In February 2014, the Liberal Party put a policy of rate capping to the people of South Australia. Indeed, we took it to the election. The Liberal Party was not elected, but it has continued to hold that policy since.

In my previous shadow portfolio role, I have spoken to individual councils, collections of regional councils and a local government forum at Wayville that about 150 people attended. I put to them that the policy is based purely upon cost of living pressures. It is what I believe is the appropriate thing to do. I believe it is important for the people of South Australia that it is pursued because all sectors of government expenditure (and in this case I count state government and local government) need to ensure that they get the best possible outcome from the money that is spent because the money comes from property owners and taxpayers—from all people. Those people will demand, by virtue of giving the responsibility to others to raise that revenue and to expend those funds, an efficiency in how that is done.

While there are many sectors, particularly from the local government community, that are upset about rate capping and its principles, there are other sectors that are really grateful for it because they think that it creates a long-term benefit for them. I am a believer that it will ensure that the local government sector is efficient in what it does. I put on the record that there are 68 councils with about 700 elected members and nearly 11,000 staff. They control $22 billion in assets and they have budgets each year of about $2 billion, but the key issue that this motion relates to is the income that comes from property owners and the rates revenue that is collected, which is about $1 billion.

In some of my discussions with councils I have used this argument continually, based on the fact that I expected the legislation that I put to the parliament last year to be somewhat challenged, and it was. The member for Frome, in what I saw as a key point on how he voted for it, said no—that was a continuation of the position he took post the 2014 election, when he had the compact with the Premier to form government on what he would do. I also had a briefing with the member for Waite, and I think there was a level of interest there, but he also decided to vote against it. So it was lost, and I understand that, but I think the continuing debate about it has been part of the reasoning behind—and I hope this is the case—the efficiencies that are occurring across councils.

The percentage figures that I just quoted to the chamber—that is, the rate increases for the 2014-15 year for some metropolitan councils compared with the 2017-18 declaration—show a downward trend. You could argue that that is on the basis that councils may subconsciously be considering the possibility of a change of government on 17 March next year and therefore the rate-capping policy becoming legislation. That is something they all have to work for, and therefore they are ensuring a continued drive for efficiency. That is what I proposed the legislation for. That is what Steven Marshall, as the Leader of the Opposition and the alternative premier, one month prior to the 2014 election put the proposal out there for—to ensure that efficiency existed.

Remember, it comes back to this $1 billion in total rate income figure. If you can argue that the discussions that have taken place have created an increase of, say, if we round it off, a 1 per cent increase less than it might otherwise have been if you use the simple numbers again, that equates to $10 million per year. That is $10 million that remains in the pockets of property owners. It is $10 million that remains in the pockets of an economy to spend in other areas to grow opportunity, and it has ensured that efficiencies are starting to be delivered through councils. Rate capping will be an extension of that, and that is what I believe is important to pursue.

An important part of the Liberal vision on rate capping is not to just say that there can be no increases. An opportunity exists for councils where they have long-term financial management plans and where they have community support for that. It is not just by the current legislation when it comes to community involvement but via a regulation that will be formed on the basis of what the Minister for Planning has as part of the charter of community engagement that comes from the planning, development and infrastructure legislation that passed through the parliament early last year for a greater range of community involvement to ensure the people who are involved, the decisions being made and the guidelines that will be used by others who make decisions for them—that is what I think is the key thing.

Where councils with involvement with communities do have that level of support for a percentage that may, in fact, be higher than the local government cost index—the example of ESCOSA—if they can demonstrate that, they can get authority from ESCOSA for an increase above the ESCOSA-declared figure for an individual financial year based on the evidence of the previous year and a projection of what the future year will actually be to go above that for a five-year period. I think that is where the legislation provides an opportunity for councils and the community to really drive the outcomes they want because the long-term financial management plan is linked to what the needs of the community are. If a council wants to pursue a particular project, then put the cost of that into the long-term financial management plan.

I am very frustrated when I read part of the campaign that the Local Government Association puts out that talks about the loss of services. Those services already form part of the budget. It is amazing to me that the Local Government Association does not believe that there is any opportunity for a continuation of services already provided when rate capping will be based upon the cost of local government services they do provide and increases that those services are meeting. It is not general CPI; it is a particular local government cost index.

It is a very poor excuse, I believe, for a local government sector and a local government association in this case to come out and say, 'You are going to lose things like playgrounds, libraries, parks, gardens and all that sort of stuff.' The cost of that operation already exists. ESCOSA, or its equivalent, will ensure that it uses projected cost increases in the provision of those services in the percentage it allows for future years, so why suddenly is there an expectation that they are going to be lost?

It is interesting to me to see that, of the 68 councils, 50 have resolved to support the local government campaign. I try to take the positive from that: that there are 18 that have not. To me, that means that those 18 believe that it is a political campaign and that the Local Government Association, by virtue of being a sector of government and a child of the state parliament because it is an act of parliament that actually controls them, have chosen not to be involved in a political campaign.

To those 18, I say, 'Well done.' I believe they are freethinkers. I have no doubt that, from those 18, there will be individual members and staff who will talk to candidates from the Liberal Party approaching the election period and say that they do not want it. I understand that, but as a council they have resolved not to be involved in a political campaign, so I commend them. I have no doubt, even from the 50 councils that have decided to support it, that there are some who do not.

I know that in many cases it came down to a vote and what the position was going to be. I know that democracy is about freedom of speech. I completely respect that, but I tell this chamber and the people of South Australia, who might have a chance to review this and submissions made by others, that this is done on the basis of efficiency of service delivery and the projected cost being controlled to ensure that people are not paying more than they have to. Private enterprise has to do that already. It is important that the local government sector, as a billion-dollar per year revenue area, has to do the same, as Steven Marshall, as premier, will ensure that state government departments do the same.

I refer to paragraph (c) of the motion, which requests information about what the Minister for Local Government, the member for Frome, has done. In 2015, after he had been Minister for Local Government for about a 14-month period, as the then shadow I asked questions of the minister about what he had done to pursue the reduction of costs and efficiencies and to assist local government in controlling what they do and the revenue they need for what they do. The only response I received referred to the 2005 financial sustainability project. There was no demonstration of what had occurred in the minister's 14 months to assist councils, even though the minister himself has come from this sector. I have seen no real demonstration of it post 2015, when I asked the minister in estimates periods what he had done to try to assist councils to reduce costs.

I can quote two examples of where I believe the minister has let the local government sector down; one was in the significant rewrite of the planning, development and infrastructure legislation. It was the first time since 1993 that the legislation had had a review—legislation that had a significant impact upon local government and its operations from an administrative point of view, in terms of the controls it had to put in place on development issues and how to consider and manage those. I would have presumed that the minister, the member for Frome, would have put forward the case for local government. He made no contribution at all—not a word said. That frustrated the life out of me.

Another example is in legislation that the minister proposed to bring to the parliament for changes to the Local Government Act. As part of the briefing provided to me as the shadow minister, I saw that there was a clause that reflected upon the requirement for councils to grant a rebate of up to 75 per cent on defined areas, an example of which is community housing authorities. At that stage, the minister recognised that as an issue and on the day that the legislation was tabled, that clause was removed.

This is a significant issue for councils across the state, particularly metropolitan councils. They are concerned about the cost implications of having to provide this rebate. 'It is on the basis of one-on-one discussions, as I understand it,' was the comment made by the Minister for Urban Development about how it was going to be addressed, but I think that leaves the local government sector at a significant disadvantage because there are not long-term agreements in place.

In considering this motion, I urge the minister and the government to ensure that they work with councils to control future growth in costs and to ensure that some assistance is provided so that there is not a responsibility transfer from state to local. Yes, there might be some dollars attached to it at the very start, but then those dollars suddenly disappear for three years, and councils pick up the remainder of that cost in the long term. This is an appropriate motion and I hope that it is supported by the house.

Mr PISONI (Unley) (11:47): I rise to support the motion of the member for Goyder and congratulate him on bringing this to the house because this is an important issue for households. I take this opportunity to remind the house that this was an election policy at the last election to tackle ever-increasing council rates. We were very disappointed, of course, when we attempted to do that from opposition, after not being successful in being able to form government at the last election. Those opposite voted to stop it from happening. They voted for the status quo and for the continuation of council rates over and above community expectations and well over inflation. The Liberal Party will take to this election the same policy we took to the last election: we will cap council rates according to the local government index.

I pick up on the points made by the member for Goyder. There is absolutely no doubt that the public debate that has been driven by the Liberal Party over the last couple of years on cost of living and council rates has forced a number of councils to re-evaluate the way they do business. I thank the member for Goyder for bringing to the attention of the house the number of councils that have actually reduced their rates in the lead-up to this crucial election period.

An honourable member interjecting:

Mr PISONI: Yes, their rate increases have been reduced, in some instances by half what they were just a few years earlier, so those are being reduced closer to the CPI. I am sure that this has happened because of the debate in the community about the way councils operate, about the way they use rate increases as the default position to fund their programs, rather than looking at the way they deliver those programs. I am pleased that as a team, through public pressure and through taking this challenge on in the media, on social media and in our own communities, we have been able to put pressure on many local governments to look at other ways of doing business.

The point I want to make is that, time and time again, we hear from the Local Government Association that rate capping will reduce services. I ask the Local Government Association: what services have you reduced to achieve the current lower rate increases compared with what you had two or three years ago? What services have you reduced? That in itself is evidence that the LGA scare campaign is nothing more than a lie. The fact is that public pressure has forced councils to re-evaluate the way they deliver services so that they can keep their rate increases down.

That will dissipate after the election. Unless there is a mechanism in place to force councils to continue to have that discipline in their budgets, we will see the floodgates open and we will see council rates rising well and truly above wage increases and the CPI, as they did immediately after the last state election. Forget about the 2½ per cent increases we saw before the election from local government. After the election, we will see 4, 5, 6 or 7 per cent increases because they will use it as an opportunity. They will argue that they need to catch up because of the reduced rate increases before the election.

There is no doubt that many in local government want to make a difference to their community. They want to ensure that their community is a better place to live in, and sometimes there is a blur as to what the responsibilities are. We have three tiers of government because there are three tiers of responsibility: the administration of communities, the administration of states and the administration of the country. Of course, it would be ludicrous for a state government to have a defence policy, so why do local governments seem to think that they need to have policies on areas over which they have no control, such as nuclear-free zones or the date of the Australia Day holiday? These are not part of the bailiwick of local government.

Local government is about delivering local services to local people. That is where the focus should be. Whenever councils move away from their core business, there is a cost involved because a report will be called for and a staff member will have to come away from delivering community services to prepare that report. There is a debate in the chamber and, while that debate on which flag they can fly or when they can have the Australia Day holiday is going on, there is no discussion of how councils can deliver better services, additional services or new infrastructure projects for their local communities.

I can understand that people use the opportunity of being on a council to be heard on issues that are important to them, but I can tell you that doing so is an indulgence. Can you imagine somebody at a board meeting at BHP, or even a small family company, getting up and making a speech about something that is important to them that has nothing to do with the decisions of the board? They would politely be told to sit down and perhaps have that discussion over a cup of tea afterwards.

But we see this going on time and time again in local government. I think it was in the West Torrens council where it was decided that pushbike riders should wear safety vests. So does that mean only in the City of West Torrens? When you cross the Parklands, heading west, you would have to pull your bike over, open the satchel on the back or your backpack, and pull out your safety vest and continue that trip. I think it illustrates that there has been a lack of discipline in local government in relation to their core business. When I was on local government all those many years ago now, there was a—

Members interjecting:

Mr PISONI: I was in my late 20s—there was a focus on infrastructure. As a matter of fact, those trees you see on Main North Road were from a motion supported by the council, put by David Pisoni, as the Nailsworth Ward. That is how long ago I was on council. Those jacarandas are beautiful big trees now. That was a successful motion and a motion that the council had control of. It could deliver the outcome and the outcome is there for future generations to share.

That is what I encourage councils to do. That is why I support this motion because this motion is all about encouraging councils to focus on their core business, to keep their costs down, to be aware of the cost of living challenges that are out there for South Australians and to look at ways that you can make your business, as local councillors and council officers, that of servicing your constituents and getting the best results with the finite money that is out there in the community to pay for these services.

I congratulate the member for Goyder for bringing this debate to the parliament. It is a debate that will continue to happen between now and the election. I am sure there will be debate after the election as well if we are successful, as we start to implement this program. We will see improvements in the delivery of services under the Liberal Party's rate-capping policy because the councils will have no choice but to look at the way they are doing business in order to be more effective and more efficient.

Mr KNOLL (Schubert) (11:57): I want to start off with a quote because this is a topic that I have canvassed before and it is a topic that the member for Kaurna and I have canvassed before in the public square in relation to how councils operate and conduct their business. In 2013, the government undertook a Local Excellence Expert Panel into local government. In speaking about councils, the Hon. Greg Crafter AO made the following statement:

To make no decisions and trying to continue in the same way as today will simply set local government on the path of steady decline.

Basically, what he was saying was that if we make no change to the local government sector, we are going to see that sector on a steady decline in the way that they provide services and their ability to go about and conduct their everyday business. That statement very clearly says that the status quo cannot be allowed to continue. I am very proud to be a part of a party that has a proactive plan to look at how local government undertakes its business and ways that it can do that better.

Decisions are best made when they are made as close as possible to the people affected by the decision. That is why I am a committed federalist and why I sit in the state parliament, as opposed to aspiring to any federal parliamentary representation, because I believe that here at a state level we are much closer to the people whom we serve, and local government are even closer again within the remit that they have. A fundamental tenet of the Liberal Party is decentralisation. Again, that is where state and local government are very important to us. We are the key custodians of it, realising that they are important sectors that need to be looked after.

We have set out a very clear mechanism by which we would like to help councils improve the way they operate. We want to give ESCOSA the ability to set rates for councils, doing so cognisant of the cost pressures that councils face, and doing so cognisant of the transfer of responsibilities that seems to have happened under this government in relation to litter and nuisance, in relation to pets and in relation to costs around e-planning and costs in a whole host of areas, such as rubble royalties. All these pressures that the state government has put on local government go towards the cost of how local government operates, and our mechanism takes those costs into account.

Those on the other side are not clean when it comes to looking at council rate increases. I think that, when we look at who needs to take responsibility for council rate increases, we have to look at the mayors of councils. We have a couple with us in this chamber at the moment. The member for Light was formerly mayor of the Town of Gawler. Over his time as mayor, rates increased by an average of 6.1 per cent. This is against a backdrop of inflation running at 3 per cent. The member for Light had rates increase at twice the rate of inflation over his time as mayor. We go to the Independent member for Frome, who was formerly the mayor of Port Pirie Regional Council. Over his time as mayor, rates had an average increase of 6.76 per cent against an inflation average of 3.1 per cent—over double.

It is definitely mayors who need to be held to account for this, and those two mayors stand condemned. If you are in favour of rate capping, as we on this side of the house are, then you are at least willing to help be part of the solution rather than just be part of the problem. When the member for Light and the member for Frome have previously voted against our push to have council rate capping, they, too, have continued to be part of the problem.

This is where I think the system needs to change, because rate capping is not an end in itself. Rate capping is only one half of the equation that is trying to put constraints on the increase in taxation placed by councils upon households in South Australia. Rate capping, to my mind, is actually a way to start a conversation about how councils undertake their business. Rate capping provides the impetus, it provides a line in the sand to start to say, 'Instead of simply increasing your rates year after year, how about we look at how you do business.'

Let's work together—state government and local government—and look at how we can fundamentally reform the sector so that it can become more effective and more efficient and keep within its remit of the powers that it should undertake. I think that discussion will only be taken seriously against the backdrop of a council rate cap.

At the federal level, the federal government is constrained by economic activity. Corporate taxation and personal income taxation goes up and down in line with employment and in line with company profits, so there are natural balances in the federal budget that cap the real revenue growth of the federal government.

At state level, we have the same thing. Our taxation, based around payroll tax and increases to payroll tax, relies on increased employment growth. Taxation around land tax or the emergency services levy relies on increases to land valuation. Stamp duty relies on economic activity in the property sector and other transactional sectors to be able to provide increased revenue. When the economy is doing poorly, there are natural limiters to the state government's revenue base. Similarly with the GST, we see that lower levels of growth in retail spending and economic activity lead to lower levels of taxation.

At a local government level, this does not happen to that extent. At a local government level, councils are able to set budgets by figuring out how much they want to spend. They then work out how much money they need and by how much they need to increase their rates, knowing that their taxation base is there, it is fixed and easily collected. That is unlike the other two tiers of government where we have to look at what we get and then at how much we can spend. Local government is more able to look at how much it wants to spend and then figure out how much tax it needs to collect.

I think that rate capping is a fantastic first step to being able to look at the way the local government sector goes about its business because we need that financial impetus. We see how federal government is dealing with budget deficits and the fact that it has to rein in spending. We hear conversations about the huge difficulties they are having with that, especially the multitude of ideas that the Coalition has brought forward that the crossbench, the Senate and the Labor Party have sought to oppose. When we look at this place, there probably should be greater fiscal restraint. Again, there are some natural limiters in there, but it does not happen at a local government level.

The other reason I say that rate capping is a good idea is that at both the federal and state level there are natural structures in our system of government that provide greater levels of scrutiny over these two tiers of government. There is a huge amount of media interest in federal and state budgets. There is a two-party adversarial system that provides scrutiny of state and federal budgets. I look at us sitting in this chamber with one party sitting across from the other, where an opposition's job is to scrutinise the spending of the government and the executive. That manifests itself in the estimates process and through FOI and constant media scrutiny. We see that at a federal level with Senate estimates committees and their two-party adversarial system.

However, that does not happen at a local government level where there is no government and there is no opposition. Technically, every elected member of a council is part of the government. Because we are talking about a range of smaller entities, we do not see the same level of scrutiny. In fact, the only time we really see scrutiny is when some outrageous bit of spending pops up, such as we have seen at the Onkaparinga council, or when there is a really unfair rate increase, such as we have seen in the Playford council in their desire to increase agricultural rates, and you see the community stand up and push back against that.

In closing, I would say that, yes, there are problems in local government and, no, we cannot continue to see average increases of 5-plus per cent when inflation is running at about half that level. I believe that rate capping is a great idea to start a conversation that will lead to true reform of the local government sector so that it can be more efficient, more effective, more cost-effective for households to deal with the cost of living pressures that we know exist in the community because we have had low wage growth since the GFC.

In the words of the Hon. Greg Crafter, we should not sit back and allow local government to stay on a path of steady decline but instead see a vibrant, controlled and constructive local government sector in South Australia.

Mr PEDERICK (Hammond) (12:07): I rise to support the motion by the member for Goyder:

That this house—

(a) notes the level of local government rate income increases over the past five years;

(b) notes the concerns expressed by the local government sector of transfer of responsibility from the state government to local government and the associated cost impact; and

(c) requests the member for Frome, as Minister for Local Government, confirm what legislative, regulatory or practical action he has pursued, investigated or implemented to keep local government rate increases to a minimum.

Rate increases are a cause for concern right across communities throughout everyone's electorate. I note that over the last 10 years in the Coorong District Council the rate money that I pay for my farming property has doubled. Along with other ratepayers, I ask, 'What do I get for those rates?' In my local government area in the Coorong, we pay for our rubbish pick-up. I am fortunate to be on the Parkin Hall Road, which abuts the back of my property. The rubbish run goes down there: we have the recycling pick-up, the garbage pick-up and, if we were going to deliver green waste, we could have that pick-up.

That is all good, but that is not covered in the rates. I acknowledge that that is paid for by a separate fee. Out of the traditional things that councils deal with—roads, rates and rubbish—rubbish is out, but rates are definitely in because they keep increasing. The issue that concerns many ratepayers, not just in the local council area where I reside but across the community, is the maintenance, rebuilding and sealing of local government roads. I note that there has been an increase, not just in Coorong but across the area.

I have had contact with several constituents in Alexandrina as to the state of some roads, and they are appalling. I had to contact the mayor with regard to Parkin Hall Road at the back of my property. I said, 'Look, in the 54 years that I have lived there, this is the worst state this road has been in.' I struggle to think that a phone call like that has to be made to the local mayor to make sure that your road is kept to a decent standard. I drive Prados, and when a Toyota Prado bounces continuously left or right on a local government road you have a problem.

On some roads in the area, people will not drive their standard two-wheel drive cars for fear of destroying them. That is what it has come to. I receive all sorts of excuses. I have certainly taken it up with my local council and other councils. I acknowledge that in my local council there is over 1,500 kilometres of a rubble road network. We have some pretty handy rubble in a lot of the area. It gets a bit depleted when you get to the south of the council area, further into MacKillop down around the Tintinara area and Salt Creek, but at my end we have plenty of rock and plenty of good rubble.

However, I am concerned when the blame is put on state government funding or the lack of these grants or the lack of those grants. I want to put on the record part of a response from Vincent Cammell, the chief executive officer at Coorong. I talked about the issues of some local roads that had been brought to me by local constituents, and one of the last lines in his letter stated:

In particular we bring to your attention that the Coorong District Council has not received any funding from the State Government through its Special Local Roads Program for the 2017/18 financial year.

Your assistance in rectifying this issue would be appreciated.

Certainly, on good advice and my understanding, this is actually federal money that has come back into play most recently from the federal government. It is distributed by a committee with Local Government Association representatives and it is based on applications from across all regions and is prioritised on need. It is obviously part of the Financial Assistance Grant (FAG) money and, as I indicated, this is federal commonwealth government money.

The issue I face—and not just in my council but across councils—is that ratepayers simply want their roads managed. From what I understand, this is a mandated operation of local government: to fix their roads, repair their roads and keep them up to speed. However, there is always this pushback, 'We're doing this, we're doing that.' As the member for Goyder said, the Local Government Association is talking about cutting services if they have to work under rate-capping arrangements. As the member for Goyder said, all those services are there: libraries, looking after park lands and a range of other services that councils do.

However, when you live in a broad agricultural electorate, those ratepayers, especially the bigger ones—and there would be some ratepayers paying upwards of $20,000 and some would be paying $30,000 in rates—just want their road. That is all they want. They want to have access so they can get to those better bitumen roads, some of which are local government roads but also state roads. I think a lot more attention needs to be taken there.

I note that the Local Government Association is about to run a significant campaign against our rate-capping initiative. It is a policy that we on this side of the house have developed to address cost of living pressures for South Australians. We understand that the Local Government Association is going to spend at least $800,000 of ratepayers' money to take up this fight, which I find interesting. If ratepayers think that is a good way to spend their money, perhaps they need to talk to their local government people.

We also understand that the transfer of responsibility from state to local government, as has been a habit of the Labor government, must not continue. We do need this rate capping to pull down the cost of living to people across the state. We believe that council elected members and staff have a duty to their ratepayers to ensure local government expenditure is responsible and in line with what the community supports.

Under our proposed scheme a body such as an independent regulator, ESCOSA, will set the rate rise that individual councils are allowed to apply, based on the costs of services that council provides. The rate cap determined by ESCOSA will be determined on a region by region basis, not just the one figure across all of South Australia, as the Liberal Party has recognised different cost pressures apply depending on the region location. I note that there are councils in my electorate, or coming back into my electorate, that have a different ratepayer base; they have to raise their funds on a smaller population. So, there is a quite a difference sometimes in the amount of rates coming into the region.

A fundamental component of our rate capping scheme provides flexibility in allowing for individual councils to apply to ESCOSA for a rate increase above the determined percentage when able to demonstrate the support of local communities. Consultation demands above the current legislative demands will be based on the charter for community engagement being prepared by the government for development plans.

Examples in which variations may be sought by councils include funding projects of regional significance, dealing with high-growth areas, population and industry, the challenges presented funding the development and/or maintenance of essential community infrastructure or backlogs and funding new and enhanced services to meet growing demand in the community. We are committed to this policy.

I just want to note that the Local Government Association makes a lot of noise about what has happened in New South Wales over the last 40 years that they have had rate capping. If rate capping has been such a disaster in New South Wales, why has their local government authority or association not lobbied governments of different colours—and they would have had plenty in that 40-year time—to change that policy? That is as simple as it gets. If it is so bad, why has it lasted 40 years?

Debate adjourned on motion of Ms Digance.