Natural Resources Management (Regional NRM Levy) Amendment Bill

Introduction and First Reading

The Hon. R.L. BROKENSHIRE (16:43): Obtained leave and introduced a bill for an act to amend the Natural Resources Management Act 2004. Read a first time.

Second Reading

The Hon. R.L. BROKENSHIRE (16:43): I move:

That this bill be now read a second time.

The Natural Resources Management (Regional NRM Levy) Amendment Bill 2016: under the NRM Act of 2004, local councils in South Australia are required under the law to collect the NRM levy on behalf of the NRM boards. NRM fees are set at different rates by eight local NRM boards across the state, and NRM fees are then charged on council bills. The act requires that councils pay the NRM board the quantum identified by the Minister for Sustainability, Environment and Conservation and gazetted on an annual basis. Local councils are then reimbursed and the regional NRM board is liable to pay councils an amount based on the costs of the council in complying with the requirements of the act.

Recent reports have indicated that residents in the South-East and the Murray-Darling Basin, could be hit with a 150 per cent, or more, increase under a proposal from regional boards. In fact, I believe that is close to happening. Those in the agricultural sector have also complained of the increased costs, which can be in the thousands, due to the high value of farming land.

Evidently, increases to the NRM levy does hurt communities, particularly in rural areas, but also in the metropolitan area. Unfortunately, this government has it set up so that councils get the blame for these massive and exorbitant increases caused by the government, with millions of dollars being ripped out of the fund to Treasury and millions of dollars being ripped out of the fund to go back into the running of DEWNR.

What this bill does is propose to remove the requirement on councils to collect the regional NRM levy, and reimburse themselves, based on associated costs. Collection of the regional NRM levy will instead be the responsibility of the minister. I look forward to a nice picture of the minister on the face of the bill that he sends on behalf of his government, if this bill is successful. The most substantial change is in regard to chapter 5, part 1, division 1 of the act, which is replaced with a new division entitled Regional NRM Levy, establishing a new NRM levy collection scheme. This new division is found at clause 7 of the bill.

The new division is a mixture of provisions from the regulations and provisions under the current act relating to the collection process for outside council areas, currently under section 97 of the act. A new regulation-making power has been included for the division which enables remissions to be prescribed by regulation and enables any gaps in the new scheme to be padded out by applying the scheme under the Emergency Services Funding Act 1998. The other amendments contained in the bill are largely consequential, as a result of introducing a new NRM levy collection scheme.

The reasons for this, first of all, are that similar levies for water management and the emergency services levy are already collected directly by the government. Bold and brave governments, historically, have collected their own levies, not put it to the responsibility of the councils. The government has capacity to accommodate collection of the NRM levy through the resources of RevenueSA, and I would suggest they would have most of the database required already.

Secondly, the LGA, and the large majority of councils, support this bill. I have consulted with the LGA, which has consulted with its members. The NRM levy collection was considered at the LGA ordinary general meeting on 15 April 2016, where the LGA resolved to oppose the current collection method of the NRM levy. The LGA consulted with member councils, and 83 per cent of councils surveyed considered the reimbursement paid to councils by NRM boards does not adequately meet the costs of collecting the NRM levy. Therefore, councils are left out of pocket, and you have even higher rates or less services to ratepayers/property owners.

Based on advice provided by councils, there is over $690,000 in unpaid NRM levies across the local government sector in South Australia. Under the current scheme, councils are unfairly absorbing the costs as a result of collecting the NRM levy. These costs include, and are associated with, losses as a result of valuation objections, inquiries and complaint handling, cost of forecasting and modelling, accounting and reporting, debt-recovery costs, costs of applying rebates and costs to configure financial systems.

Further reasons why the LGA does not support the current NRM levy collection scheme include:

councils not supporting the exponential increases to the regional NRM levy and the NRM water levy;

many community members mistake the state government levy for increased council revenue;

there are hidden administrative costs to councils in collecting the levy on behalf of the state, particularly in relation to non-payment and rebates;

many councils consider that they are in fact subsidising the state government tax collection operation;

introducing the direct collection of the emergency services levy has created an alternative to collection via councils; and

councils object to local service delivery being reduced while cost recovery payments to DEWNR increase. Local communities are paying the price for the deep cuts to the state's environment budget in recent years.

In contrast to the NRM water levy, which is collected by the minister on behalf of the NRM boards and the minister provides to the boards only the amount collected, councils are required to provide the full amount gazetted to the NRM board, whether collected or not.

Implications of the current approaches include councils being required to use council rates to subsidise the NRM levy, potentially requiring reductions to council services, and NRM boards not receiving the expected NRM water levy and being required to make reductions or changes to their programs to accommodate shortfalls in funding received. In conclusion on my second reading on this bill, I quote directly from the LGA:

It has become untenable for councils to continue to act as the NRM levy collection agent. The LGA has called on the state government to introduce legislative change prior to the 2017/18 budget to completely remove this obligation from the Natural Resources Management Act 2004.

The LGA maintains its position based on feedback from its membership that the state government should establish a different mechanism for collecting the NRM levy.

Family First agrees with the LGA and the councils on this, and I trust colleagues will look at this as a sensible amendment to the legislation. I advise the house that, given that it is important timewise that this proceed with expediency, it is my intention to bring this to a vote very early in the sitting year of 2017. I commend the bill to the house.

Debate adjourned on motion of Hon. J.M. Gazzola.