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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-06-14 Daily Xml
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LOCAL GOVERNMENT REFORM

The Hon. R.B. SUCH (Fisher) (11:55): I move:

That this house calls on the state and federal governments to request the Productivity Commission to undertake a review of the local councils in metropolitan Adelaide, as well as the Mount Barker council, with a view to outlining possible reforms.

Members know that I have been on this bandwagon for quite a while. I acknowledge local government is a very important sector, that is why I want to see us have the best possible and most efficient, most effective and most responsive sector of local government. I am not anti-local government; I was involved in local government for a short time. I have a lot of respect for the people, particularly those who are volunteers on councils, who put in a lot of time for often a small pittance in terms of remunerating their expenses. So, this is not about attacking local government.

Some people have said, I think it was the member for Kavel: 'What about state and federal government?' I would like to see them perform, too. There are a lot of anomalies and areas in which state and federal government could be reformed. All I am asking for, through this motion, is a review, and the Productivity Commission are the people who have the resources, the economists, the computers and the wherewithal to conduct an independent review of the councils in metropolitan Adelaide—and I include Mount Barker in that review—with a view to outlining possible reforms.

It does not commit to do anything other than to have a look at the situation. If I had the money I would pay KPMG or a firm like that to do it, but I do not have the resources to do that. I cannot understand why anyone would be opposed to a review. If someone is opposed to the review, what are you trying to hide? Why would anyone want to oppose having a look in a proper, scientific and objective way at how the councils are operating?

Last night I received, coincidentally, communication from my local council indicating that they are facing a very serious situation and they are unable to cover their costs basically in terms of the current rate structure and it is likely they will have to put up the rates. They are also facing the prospect of a significant deficit and a backlog, they said, of $50 million (this is Mitcham) just in relation to footpaths and some maintenance issues. If you look at the tables—and Bruce Pennington who is a retired accountant has done a lot of work on this—of metropolitan councils (and, as I said, I include Mount Barker) I think at the time he did this, which was earlier this year, something like 13 metropolitan councils were running deficits, some of them quite significant amounts in the order of $3 million and $3 million plus, and so it goes on.

Anyone who has dealings with local government would know that they are under the pump in terms of being able to carry out the tasks that come under their aegis. Mitcham in their paperwork that they sent to residents have suggested that as a result of state government requirements they are now facing an additional bill of half a million dollars because they have to employ someone to go around checking roof trusses, and that is as a result of the inquiry and legislation following the collapse of the roof at West Lakes. I do not know why every council now has to have a truss officer. We can make a few jokes about trusses—'truss' me! Mitcham says that and a couple of other things are going to cost them about $500,000. It is not just that issue, but they now have to take on someone who is going to be a truss officer to go around, trust me, looking at roofs of all houses that are being built in their council area. That will apply to other councils.

How inefficient and inappropriate is it if all the metropolitan area councils have to have a similar officer going around looking at new building sites. That highlights some of the problems that we have. We have incredible duplication. I think it was Charles Sturt council sometime back which bought a computer system costing $5 million, not shared with anyone.

One council in the metropolitan area could do all the payrolls and rate notices. Someone suggested to me that Services SA—now that it is being reformed by the minister—could handle a lot of these payments. They would probably need to improve their performance to do it. Councils keep saying, 'We're going to share services; we're going to work together.' When are we going to see evidence of that? When are we going to see joint tendering by all the metropolitan councils for trucks and other equipment? When are we going to see one waste collection contract rather than several? We keep hearing noises but we do not see much action.

As the rate notices are issued now—and many of the councils in the metropolitan area would be issuing notices in the order of 6 per cent or more—they still will not address the backlog of work that they have to do. I have always argued that they should get a share of growth taxes—GST or income tax or something similar—otherwise they are going to keep relying on property taxes and little old ladies who get caught parking for too long where they should not.

That is the sort of thing that the Productivity Commission can look at. If you look at South Australia and the total number of councils, according to these figures from the ABS we have 68 councils with a population of 1.6 million (I have rounded that off). Victoria, which has a population of 5.5 million (rounded) has 79 councils, so that is 11 more councils for 3½ times the population. That in itself does not prove a lot because it is not simply about making councils bigger; it is about making them more effective.

I have often argued that I do not know how many councils we should have in metropolitan Adelaide. You need to crunch the numbers and you need to look at being responsive to ratepayers and issues like that. Just those crude statistics from the ABS suggest that South Australia has a lot of councils for a fairly small population. That may be appropriate, but I do not know whether it is. My focus is in respect of the metropolitan area.

Bruce Pennington has drawn up a list of a whole lot of measures and calculated per council what it costs per elector for the wages bill of that council. In Holdfast Bay council, each elector is paying $434 for the wages bill of the administration; $451 in Norwood Payneham; $440 at Marion; $440 at West Torrens; $434 at Unley; and $529 at Adelaide Hills Council. The question is: what do you get for that? That is also what you need to look at. It is one thing to say, 'We pay so much in rates,' or, 'We pay so much per head to support admin,' but you have to look at both sides of the equation: what do you get for it?

Mitcham, where I live, traditionally had a very low rate, but that was because they spent little on infrastructure and services. Now it is catching up with them because administrations and councils in the past kept a low budget and also kept services and infrastructure at a low level. Just highlighting that council, I believe they have gone from two-thirds of their staff being outdoor workers to two-thirds inside and one-third outside, so the ratio is now reversed.

Across the metropolitan area of Adelaide (and this is where the Productivity Commission could, I am sure, make some sound judgements) there is the potential, I believe, for enormous savings in terms of not having 19 works depots. I have said before that I do not believe Walkerville has one but that the others have. You can just about throw a shovel from Unley to Mitcham. Why do each of those councils need to have a works depot? They each have council chambers, and they each have a mayor with a personal assistant; is that really necessary?

I think you will find that, in the lead-up to the next election, people are going to start screaming about the cost of living. In fact, last night, an elderly guy of Greek origin who lives near my brother said to me, 'Bob, a lot of the elderly people in the community from a Greek background are hurting with costs of living increases, electricity, water, council rates and so on.' The message for the major parties, leading up to the next election, is going to be, 'You will want to be able to do something about the cost of living or else you're going to get a big kick up the backside,' and council rates is part of that equation. In the City of Onkaparinga, where my electorate is, I know that their rates are going up 6.3 per cent and, on a house valued at $400,000, I think they are going to be paying something like an additional $76.

Quite frankly, I do not know how some of these people on a low fixed income are surviving at the moment. With their electricity and water bills, council rates and all these taxes and charges, I am sure that there are a lot of people who cannot afford to heat their home at the moment. They would be going to bed because it is the only way they can keep warm. With the squeeze, which is coming also from council rates, I think that in the very near future you are going to have a lot of very angry people—they are already starting to get angry. If you do not reform the council system so that people get better value for their rate dollar, I think that will add to the pain and anger in the community.

As I have said, with this motion, I am not passing judgement on how many councils there should be. It could well be that the Productivity Commission suggests that councils should be required to cooperate more and share resources. Councils keep saying that they are going to do it, but I do not see much evidence of it. I think there are eight councils in the metropolitan area, and they do a bit of joint tendering for fuel and vehicles and so on. But all councils should be doing it. They should all be working together. They should be sharing payroll—as I have said, one council with a big computer system could easily do the payroll for all council employees—and one could do the sick leave, personnel management and all that sort of stuff.

Maybe the Productivity Commission will recommend resource sharing and greater interaction, rather than people duplicating expenditure. I know that some councils cannot afford to have a ranger out of hours, but some of the bigger ones can. If you look at Onkaparinga, it has a service out of hours, and it is also able, because of its size, to provide fantastic community centres. Smaller councils cannot provide those sort of things. Some have a proper library service; some do not.

The Productivity Commission, I think, is the body to have a look at these issues—to look at the facts without bias. I put forward previously, as members would know, for a retired judge to look at it, but I think the Productivity Commission is a good avenue to go down. It is not subjective, it has highly-qualified people and it can crunch the numbers and, at the end of the day, it is then up to the government and the parliament whether they do anything about the recommendations.

I am not passing judgement on what the Productivity Commission will find. It might come to the conclusion that the current arrangement is the best one, and that is fine. All I am asking is that we have a look it. It could well be that the Productivity Commission says that you will not get a better arrangement than what currently exists and, if that is the case, I am happy to live with that.

I commend this motion to the house, and I ask members to give it, as they normally do, detailed consideration and thought and not dismiss it lightly on the false pretence that this is somehow an attack on councils. It is not; councils are a very important tier of government. However, the effort to bring about the most efficient and effective council structure and operations is not likely to emerge from the current arrangement. It is not going to be self-generating.

The LGA has a committee, which is going to report at the end of 2013; that in itself tells you something. By its very nature, there is an inertia for reform in the local government sector, and it would be better if a completely independent body has a look at the issues and comes back with proposals which the government and the parliament can look at and either accept or reject, and they should be put to the community as well.

Mr SIBBONS (Mitchell) (12:09): The member for Fisher has called for the state and federal governments to request the Productivity Commission to undertake a review of the local councils in metropolitan Adelaide, including Mount Barker council, with a view to outlining possible reforms.

I commend the honourable member for his dedication in pursuing this topic over a number of years. This is not the first time that the honourable member has called for reform of councils in metropolitan Adelaide. In 2009, he called for the establishment of a commission of inquiry, to be known as the 'metropolitan councils boundaries reform commission'. The honourable member wanted the commission to inquire into a report on the appropriate number and configuration of metropolitan councils in South Australia, with the powers of a royal commission.

The honourable member has previously put similar motions in May 2007 and October 2008. I acknowledge his efforts in continuing to promote public debate on the need to strengthen local government so that it can meet the challenges of the future and for councils to deliver services to their communities efficiently and in a cost-effective manner. Nevertheless, the government does not support this motion. The government considers that there are more important things for state and local governments to focus on at present.

On 17 May 2012, the Premier and the President of the Local Government Association signed the State/Local Government Relations Agreement, which includes a schedule of priorities for 2012-13. The state government has identified seven priority areas of focus for the state, and the schedule of priorities appended to the State/Local Government Relations Agreement gives particular focus to those seven priority areas because of their encompassing nature. State and local government already work together to bring significant benefits to the state, as do local councils both in the metropolitan area and in our regions.

The Productivity Commission is an advisory body that is an agency of the Australian government. The core function of the commission, according to its website, is to conduct public inquiries on key policy and regulatory issues bearing on Australia's economic performance and community wellbeing. In fact, the Productivity Commission is currently undertaking a benchmarking study into the role of local government as a regulator.

In undertaking this study, the Productivity Commission has been requested to benchmark the extent to which particular approaches to the exercise of regulatory responsibilities by local government authorities affects costs incurred by business. One can see that this study will have relevance to the local government sector across Australia. However, I fail to see the relevance for the Productivity Commission in investigating our metropolitan councils in Adelaide (and let us not forget Mount Barker) and coming up with a reform proposal.

The state government does not support forced amalgamations of councils. If councils wish to amalgamate, the Boundary Adjustment Facilitation Panel has been established under the Local Government Act 1999 to consider local government boundary reform. Therefore, the government does not support this motion.

Debate adjourned on motion of Mr Griffiths.

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