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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
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Local Government (Boundary Adjustment) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 16 November 2016.)

Mr PISONI (Unley) (16:26): 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: I am informed by the table that the bill has to pass the second reading stage before you can do this. Are you going to speak to the bill as a whole and we will get to your contingency later?

Mr PISONI: Thank you, I misunderstood the instruction that I received earlier.

The DEPUTY SPEAKER: You are the lead speaker?

Mr PISONI: I am. The Liberal Party supports this bill. I flag that we intend to attempt to introduce some amendments in line with Liberal Party policy that will help tackle the cost of living that South Australians are experiencing at the moment—the high cost of living through council rates, water rates and electricity charges. Of course, that is compounded by the fact that there are so many South Australians who are now working part-time compared to, even five years ago, those working full-time.

The government has had this extraordinary situation where they have transitioned from a full-time economy to a part-time economy. The growth in jobs that we are seeing in South Australia are part-time, and that means that there is less money in people's pockets. At the same time, we are seeing a situation where there are unchecked increases in council rates throughout South Australia.

The opposition supports the bill that has been put forward by the Minister for Local Government. This bill follows on from draft legislation in a discussion paper released in August 2016 under a proposal to amend the provisions for boundary adjustments and amalgamations within the Local Government Act 1999. The boundary adjustment facilitation panel was abolished in 2014 as part of the state government's extensive review of boards and committees, and the panel's functions were transferred to the Minister for Local Government.

Consequently, the minister directed the Office of Local Government to work with the Local Government Association to undertake a full review of the legislation underpinning the boundary adjustments process, specifically, the initiation, assessment and decision-making process. Currently, South Australia is the only state that does not allow a minister to initiate a boundary adjustment proposal, relying on ratepayers and councils to put forward suggestions.

Over the past two decades only minimal changes have occurred to council boundaries, but it should be remembered that this period goes back to the late 1990s, when there was a statewide reduction from 118 councils to 68 councils, so I can understand that low activity to some degree. Public-initiated submissions require at least 20 eligible electors, which are submitted to the council, which the council can support or oppose. A submission, either initiated by the council or the public, is then lodged by the minister.

The bill introduces boundary adjustment reforms in line with interstate jurisdictions. It has been endorsed by the LGA Board and was the focus of the Premier's State/ Local Government Forum discussions. The key elements of the bill are:

the introduction of a simplified pathway for administrative proposals (being those that correct historical anomalies and boundaries);

a simpler and broader initiation process allowing proposals to be initiated by electors, two or more councils or a single council, the Minister for Local Government or by resolution of either house of parliament;

My understanding of the bill is that it gives the minister some discretion as to who pays for any work that needs to be done. There might be a council that is interested in pursuing a boundary change, but the adjoining council might not be interested in doing it. They could put a case to the minister and the minister could decide, 'Yes, I think it would unfair for the council that does not want to merge to actually pay the costs of this investigation and so the costs will be borne by the council that wants the investigation.'

Alternatively, the minister might even decide it is important for the broader government operations in South Australia and the minister may decide that the state government will pick up the bill, so there is some flexibility for the minister there, as far as I understand it. Is that correct, Geoff?

The Hon. G.G. Brock: We'll see how we go.

Mr PISONI: Okay, thank you. That is certainly what I heard in the briefing. I continue:

the Local Government Grants Commission to undertake the initial assessment of proposals and to make recommendations to the minister;

independent analysis of general proposals—significant boundary changes, amalgamations or significant structural reform—by one or more investigators with the relevant expertise for each proposal;

the ability to recover reasonable costs for the review of proposals, other than those initiated by the minister or parliament—and that is what I touched on earlier;

that it inserts principles at the request of the LGA to support regional collaboration to create efficiencies and therefore offer a viable alternative to structural change; and

that the legislation commence 1 January 2019, following the November 2018 local government elections.

My amendments, which I hope to be able to introduce, actually bring that forward by a full 12 months, so that the 2018 elections can be considered on any boundary changes that may have facilitated before the election, rather than ratepayers maybe having to wait another four years before they see any change.

The bill provides for the commission to appoint one or more investigators to inquire into a proposal and consider:

the financial implications and impact on resources that the proposal is likely to have on any council to which the proposal relates;

appropriate community engagement;

the level of community support for boundary reform in the area;

the nature and extent of any plans for implementing the proposal;

any guidelines published by the commission; and

any other matters prescribed by the regulations.

The bill provides that the commission may recover reasonable costs on a fee-recovery basis. The LGA's position is for all reference to cost recovery to be removed from the bill. It believes that inserting cost recovery into a new model for boundary adjustment will significantly deter take-up of the process by councils and is a considerable disincentive to reform.

As I said in my opening remarks, the opposition supports the bill and we will be attempting to introduce some amendments to the bill at the appropriate time, both in this chamber and in the Legislative Council if we are unsuccessful in this chamber. I am, of course, open to discussing amendments with the government between the houses and taking that back to the party room for further consideration. On those points, I commend the bill to the house.

Mr KNOLL (Schubert) (16:34): I rise today to also support the boundary adjustment bill, and in doing so I want to acknowledge the change in process that has been put on the table. I think that one of the reasons that this has been put forward is a way to try to make councils more efficient, more accountable, more representative of the people who elect them, and this is certainly one idea and one we are willing to support, but I think there are other ideas that can help to achieve the same aims, and one of those is rate capping.

In terms of ideas about how we can make our local government sector more accountable, more efficient and more representative of the people who look after them, we first have to understand that there is a problem in the first place, and that problem is summarised best by a man who I am fairly certain was a member of the Labor Party and a minister in a Labor government—a guy called Greg Crafter. He was part of the Local Excellence Expert Panel, in fact he was the chair, and he had this to say in relation to the local government sector:

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

What he meant by that is that there are deep-seated problems that exist within the local government sector, that there are problems around its structure and the way that it operates that need to be dealt with, and that for us to continue on the same path will lead to the overall, not demise, but reduction in the effectiveness and the efficiency of how that sector works.

We as Liberals like our government to be as close to the people as possible, and local government is the sector that is closest, most localised, to the people it seeks to serve. We are huge supporters of local government on this side of the chamber but, like any good coach, like any good mentor, like any good person who has a desire to see the sector thrive, we believe that we need to provide an impetus for the sector to change. One such way we can provide that impetus is by capping council rates here in South Australia.

We on this side of the chamber understand the value of local government, and we also want to be there to help the sector improve. Capping council rates is an extremely important mechanism to stop the unchallenged increases we have seen in council rates over the last number of years. I have previously made mention about the fact that the Minister for Local Government when he was mayor presided over increases of 6.76 per cent, when over that same period inflation ran only at 3.1 per cent.

It is the same when the member for Light was mayor of the Gawler council. He presided over average increases of 6.1 per cent, when inflation ran at only 3 per cent. What we can see here, if that is extrapolated, and we see those rises continue and see those rises happen more broadly, which we have done across the local government sector, is that council rates will become ever more—

The DEPUTY SPEAKER: Member for Schubert, if I could just interrupt you for a moment, I have just been advised that the issue you are talking about is not relevant at the moment. You can talk about it later on if it is successful later, but you cannot actually do that within the realms of this bill. Everyone is going to listen to the member for Unley who has a problem with that.

Mr PISONI: Point of order, Madam Deputy Speaker.

The DEPUTY SPEAKER: Yes, we are listening to you.

Mr PISONI: This bill is about the configuration of council boundaries, and council boundary changes could have cost impacts when it comes to the running of a council, and rates are very much an important part of revenue.

The DEPUTY SPEAKER: I can only be guided by the advice of the table staff, and they feel that is a very long bow.

Mr PISONI: But it is your ruling.

The DEPUTY SPEAKER: Yes, and I am going to take their advice because, as they have said to me, you are quite at liberty to speak about that later on. It is not because we do not want to hear what you are saying: it is just not at this very moment. I hope that is acceptable to both the members.

Mr KNOLL: Can the Deputy Speaker rule on what opportunities there will be for members to speak more broadly on a contingent motion when it is debated? What are the time limits involved?

The DEPUTY SPEAKER: I am advised general rates discussion, but not specifically capping because it is not part of the bill we are looking at at the moment. If you have a problem, perhaps the member for Unley can discuss it at the table while you continue with your not so specific remarks. That is the best I can do under the circumstances.

Mr KNOLL: There have been many opportunities in previous bills that have been debated in this place for us to present alternative ideas to solve the same problems or, for instance, to seek to change bills as they are put on the table, and that is fine.

I am happy to be more general and discuss the fact that, more generally, rate increases have been a problem across the country. In New South Wales, the state government has sought to intervene more generally in the way rates are set. In Victoria, over recent years they have had average increases of 4.98 per cent. In South Australia, the best figure we have is that 5.55 per cent is the unweighted average rate increase over the past four years. I think that is a key measure of how the sector is performing.

If I can speak more generally, in addition to the issue of council rates—their rises and falls and their general impact upon how the local government sector works, especially in relation to ideas around how boundaries are set and how that impacts upon the cost structure—we need to have a more broad conversation about the way the sector works. If there are alternative ideas that help to provide the impetus for that discussion, I think that they should be considered.

The local government sector, which I know is frustrated with some of the ideas out there about rate increases more generally, need look no further than this Labor government for some of the culprits as to why those large increases need to happen. A Labor government that continues to push costs, inefficiency, red tape and regulation upon the local government sector forces them to make changes to the way they set rates and the cost structure that exists for them. We in this chamber need to help and present ideas that change the nature of that conversation.

The bill before us does in some part change the nature of the conversation, but we need to start talking about how the local government sector can be more efficient. This is certainly one idea, but there have to be other ideas, whether it is dog and cat management, NRM levy collection or any number of ways—for instance, the latest idea is around planning changes and the fact that the local government sector now has to pick up the tab for the e-portal the government is seeking to put online as a result of the changes. There are so many different ways in which we here in this place make life harder for the local government sector.

If there are ideas to help stop at the top the level of increase that councils foist upon their ratepayers, that will help to spark a conversation about how we can actually change the local government sector and make it more efficient. If that helps to reduce the red tape burden, regulation and cost, then they are ideas we need to sit down and look at, but I think that can only be done through the prism of a more definite mechanism that helps to create impetus to have those conversations. The alternative is to continue, as Greg Crafter said, along the same path that we are on now; that is, we will see unfettered cost increases, we will see unfettered rate increases, and all that is borne by the South Australian ratepayer.

If we continue to ignore this problem, it will only get worse as time goes on. I think it is extremely responsible and prudent that we on this side of the house present ideas to the parliament about ways we can fix these issues and sit down and have an honest conversation about how the sector works.

Speaking more generally about the local government sector, it is different from state government. We sit in this chamber, we have a government and we have an opposition. Every day that this parliament sits, we come into this chamber and critique the government. I think we provide a very solid and robust critique of this government. The media sits here, they report what goes on and the South Australian public gets smarter and makes their own judgement. That does not happen to the same degree in the local government sector. There is not an adversarial system of government and opposition. Local government, via its very structure, is one that does not invite scrutiny, and—

The DEPUTY SPEAKER: The minister has a point of order.

The Hon. G.G. BROCK: I believe that they are wandering away from the concept of this bill, which is allowing for easier amalgamation of boundary adjustments. I think they need to get back to the subject.

The DEPUTY SPEAKER: We are going to listen very carefully and try to get back to the actual nub of the bill, if we can.

Mr KNOLL: Thank you, Deputy Speaker. As the member for Frome has pointed out, this bill is about trying to help make local government more effective, more representative, more efficient, and providing different mechanisms for how boundaries can be adjusted, and that is laudable. I am seeking to make a more general comment, as per the Deputy Speaker's previous advice, about the sector.

Whilst this bill seeks to try to make the local government sector more accountable to the people that it represents by making those boundaries fit more appropriately with the people that they seek to represent, there are other broader structural issues within the local government sector that also exist around how councils are constructed and formed. The outcome of those structures is that the local government sector is less accountable and transparent.

We only need look at the front page of today's The Advertiser to see the lengths to which the Onkaparinga council went to try not to disclose costs that it had incurred. We need to change the conversation. We need an impetus to change the conversation, and we need to look at the structural deficiencies that exist within local government. I believe the other manifestation of the lack of accountability of the local government sector is the fact that we have such low turnout rates at council elections, of around 30 per cent.

I believe that this bill, by making boundaries fit more closely to what people want to see, will help to potentially encourage and increase the rate of voting participation amongst councils. That would be a very good thing. It would be a good thing for people to buy in, get themselves involved and apprise themselves of what is going on within their council area, because things need to change. Whilst I think there are some difficult conversations to be had in the future with the local government sector, I do not think that councils should be scared of those.

Councils will find a willing partner in the Liberal Party, who will want to sit down and talk through existing issues and find practical solutions. If we can cut out red tape, waste and regulation, we can help to reduce the cost structure of local government. That lower cost structure can be passed on to South Australians and that frees up money that can be spent on better, more productive uses. It can help to reduce the cost of living for South Australians, which we know is hugely under threat. Look at the increases to our electricity prices and to our water prices. We see the government's continual crusade to increase the emergency services levy. South Australians are saying, 'Enough is enough.' The local government sector cannot be spared in the Liberal Party's crusade to reduce the cost of living for South Australians.

So whilst this bill is a very small step in the right direction, there are much bigger steps we need to take, and they need to happen on the expenditure and the revenue side of the aisles. I look forward to the Liberal Party prosecuting the case into the future regarding how we can achieve a sustainable local government sector that is strong, resilient, efficient and effective, representative and transparent so that we can provide better government here in South Australia.

Mr PEDERICK (Hammond) (16:50): I rise to speak to the Local Government (Boundary Adjustment) Amendment Bill 2016. This bill was introduced by the minister, the member for Frome, in November last year. It follows on from draft legislation and a discussion paper released in August last year on the proposal to amend the provision for boundary adjustments and amalgamations within the Local Government Act 1999.

While this has been outlined so well by the shadow minister and the member for Schubert, I think there is always room for reform. As a local member, and as probably all members in this place do, I found myself looking at a lot of local government issues coming into my office. I have always questioned why, but sometimes people just cannot get the answers they want. I know that when I instigate meetings, whether it is with mayors and CEOs together or on separate occasions on their own, you sometimes see a look of angst on their face. However, I believe that no matter what level of government action people want to take, if I am approached as the local member I will take action one way or another to see if I can resolve the issue.

As has been discussed, rates is an issue that regularly comes into my office, and I am sure it comes into every MP's office. This is where boundary reform comes into play. I know how difficult this would be in areas I have represented in the past, including the Mallee—as long as I get through the processes I will hopefully represent the Mallee again after next election—and there is around the Murraylands, the Coorong and East Murray.

The issue is that different councils, some because of a low ratepayer base, charge higher rates. Landholders either in my electorate or, at the moment, just neighbouring my electorate, get up in arms because they have land, say farmland, in one council and they pay half the rates that they pay in the adjoining council. So it will not be as simple as it seems as far as the amalgamations are concerned. There will be a lot of technical issues to take into account.

I was shown the attitude once when some constituents wanted to move from one council to another. They were saying, 'Well, our roads aren't getting looked after,' and that kind of thing. They were not getting the services out that end of the relevant council, but I knew for a fact that part of the debate was not just about that but also that if all their property had been in the adjoining council they would be paying something like half the rates.

That is significant, and it is certainly significant for farmers who have had to get bigger over time as a matter of survival. There is an old saying in agriculture that you either get big or get out; you might have had someone operating 1,000 acres in the past, a fair while ago now, and being quite successful in the sort of country around the Murraylands and the Mallee, who now needs 4,000 or 5,000 acres—and a lot are operating more than that. Some of this can be leasehold arrangements or owned in their own right. The rates these people pay can be quite significant, and just because things are at a higher level does not mean people are better off when you amortise it over the amount of land they own. It does come in at regular intervals, whether you pay it quarterly or in one fell swoop.

There have been probably more informal discussions in my area. I would not be compelled to instil compulsory boundary realignment on anyone, but people could have a voluntary proposal. I can think of examples in my electorate and in some very close adjoining country with similar demographics and similar operations. There would be a massive impact on the rate change that would have to be instigated right across the board, if you amalgamated three or four council areas in or near my electorate. That is because of the simple fact that some of these councils have such a low ratepayer base, some have a bigger ratepayer base and obviously some have some bigger towns where they can spread the load.

Obviously, in a lot of instances the cheapest rates are in some of the better suburbs of Adelaide just due to the population. That is what provides a better outcome as far as the original ratepayer. However, when you are out in those far-flung areas where there is a lack of population and you are in a small local government area, you have to pay. This is a significant issue that has been put in front of me many times. There was a concerted effort a few years ago by some local residents to move part of their council boundary into the next council so that, essentially, as I indicated earlier, they could halve the rates that they pay.

There are a lot of proposals out there and, as the member for Schubert identified, the New South Wales state government has put a rate management process in place and we are certainly looking at it on this side of the house. It is a serious cost-of-living exercise. However, I also say that councils have been forced to do a lot of things by state governments that they should not need to do. One thing I have raised in this place before is corella management. It breaks my heart—

Mr Pisoni interjecting:

Mr PEDERICK: Well, it is part of their job that they are doing, and this is put down on councils when it should be a natural resources management issue. However, when you go to the natural resources people they say, 'No, we have nothing to do with corellas'—even though they are birds and they fly through the environment and wreak a lot of havoc on our gum trees and other trees—'that's a council issue.' This is why I wonder why we have natural resources management, apart from the fact that there is a levy-raising base for the state government to pay their employees.

There are a whole range of issues like corella management. I must admit that the Coorong council has taken a more courageous stance than some councils in their relocation program for corellas, and I commend them for it. I know the Alexandrina Council, after many different attempts to save their trees, especially in the Strathalbyn area—which is just outside my electorate in the electorate of Heysen, but I used to represent Strathalbyn in my first term in parliament—has taken to lethal means to manage corellas, not so much as a culling exercise but as an exercise to scare them off. That is just one example, but there are so many other things.

In regard to natural resources management, they have to collect the levy through the rates notices, which impacts on what councils can deliver. It gets frustrating when you meet with councils as they sometimes seem to be on two different platforms: you have the elected members, and then you have the bureaucracy of council. On many occasions, they appear to me to be operating on two different playing fields.

In regard to the legislation, the boundary adjustment facilitation panel was abolished in 2014 as part of the current state government's extensive review of boards and committees, and those functions were transferred to the Minister for Local Government. At the time, the minister directed the Office of Local Government to work with the Local Government Association to undertake a full review of the legislation around the boundary adjustment process, and certainly around the initiation, assessment and decision-making processes involved.

South Australia is the only state that does not allow a minister to initiate boundary adjustment proposals, relying on ratepayers and councils to put forward suggestions. Over the past two decades, only minimal changes have occurred. I must say that when the changes were put to me about the two neighbouring councils I mentioned earlier, they were knocked back and I can understand why because it would have made a smaller council smaller again with less ratepayers, and then they would have had to inflict more pain on the ratepayers left in that community. You have to remember it goes back to the period of the mid to late 1990s when there was a statewide reduction from 118 to 68 councils.

A public-initiated submission requires a minimum of 20 eligible electors, and this needs to be submitted to a council, which can support or oppose. That submission, whether it is initiated by a council or the public, is then lodged with the minister. The boundary adjustment reforms in this bill are in line with interstate jurisdictions and have been endorsed by the LGA Board. The key elements of the bill are:

the introduction of a simplified pathway for administrative or minor proposals, being those that correct historical anomalies in boundaries;

a simpler and broader initiation process allowing proposals to be initiated by electors, two or more councils or a single council, the Minister for Local Government or by resolution of either house of the parliament;

the Local Government Grants Commission to undertake the initial assessment of proposals and to make recommendations to the minister; and

independent analysis of general proposals which involve significant boundary changes, amalgamations or significant structural reform. This is achieved in the bill by one or more investigators with the relevant expertise for each proposal.

There is the ability to recover reasonable costs of the review of proposals other than those initiated by the minister or the parliament. The bill also inserts principles that request the Local Government Association to support regional collaboration to create efficiencies and therefore offer a viable alternative to structural change. The legislation is targeted to commence on 1 January 2019, which obviously follows on from the local government elections in November 2018.

There were several options, I believe, considered by the government, but the involvement of the grants commission is the preferred LGA option as it already collects local government data. The bill also provides for the commission to appoint one or more investigators to inquire into a proposal and consider the financial implications and impact on resources that proposal is likely to have on any council to which the proposal relates. There obviously has to be the appropriate community engagement and a level of community support for boundary reform in the area, so there certainly needs to be a lot of discussion in regard to any council realignment or any council amalgamations.

I note that quite a few councils across the state have amalgamated some of the service delivery, and you can see this in the area of waste. Some of them have worked out how to manage plant, whether they do a hire-back proposal from one council to the other, with one owning big plant, such as a big bulldozer, for instance, a D8 or something like that. Those are things that can save significant money for councils as long as they are well managed and well accounted for.

This is a big process even with a minor change in some council areas, as you can inflict more pain if a small council decreases in size because of a boundary change, and that has to be taken into account. As I indicated earlier, if you have a situation where you are putting together councils that have a vast difference in their rate base and how the rates are charged, there will be some major issues to sort through. That needs full public approval before any boundary reforms take place. With those few words, I support the bill.

Mr SPEIRS (Bright) (17:06): It is a pleasure to be able to rise today to speak on the Local Government (Boundary Adjustment) Amendment Bill 2016. As members would be more than aware, local government reform is certainly something I have a personal interest in, and I have raised it in this place on many occasions since my election in 2014. The issue of changing the boundaries of local council areas is something I have an interest in because of my general interest in local government reform, but I also have an interest at an electorate level within my community.

There are a couple of areas that I think could be tidied up within the electorate that I represent to make council boundaries work better. I have raised one of those matters with the minister. When I had my audience with him, I was pleased that he raised that the Local Government (Boundary Adjustment) Amendment Bill would be coming up and that there would be an opportunity to make the process of changing council boundaries that little bit easier. That is what this bill seeks to do.

I want to go through the key elements of the bill and give an overview of the bill before I provide commentary on my local community. The key elements include the introduction of a simplified pathway for administrative minor proposals, being those that are correct, historical anomalies and boundaries and a simpler and broader initiation process, allowing proposals to be initiated by electorates, two or more councils, a single council or the minister for local government or by resolution of either house of parliament.

The Local Government's Grants Commission will be able to undertake the initial assessment of proposals and will make recommendations to the minister. It also includes independent analysis of general proposals, significant boundary changes, amalgamations, or significant structural reform by one or more investigators with the relevant experience for each proposal.

The bill will also include the ability to recover reasonable costs of the review process. It will insert principles to support regional collaboration to create efficiencies and therefore offer a viable alternative to structural change. That is something that the LGA is particularly supportive of and, I understand, has requested appear in this bill. The bill also seeks that legislation commences on 1 January 2019 following the November 2018 local government elections. That is something that the Liberal Party will seek to amend through this process.

Local government reform, as I mentioned, is something I hold dear to my heart, having served on the City of Marion council for four years, between 2010 and 2014. While I have said in this chamber before that that often makes me a champion of local government, my time on the City of Marion council also opened my eyes to what could be done better in the local government sector. It has certainly made me a critic with regard to many aspects of the way local government operates in South Australia.

I have said here before that I have concerns about the way that councils set their rates. I believe it is often a backward process, with councils coming up with a wish list of activities that they would like to achieve during a particular year and then asking the finance officers within a local government to tell them how much those will cost. Once they have been able to calculate the cost of those particular projects and initiatives, they then ask the finance officers what council rate rise will be required to deliver the required money to make those projects happen, and then they jack up rates accordingly.

I think that is a very backward process. They are coming up with their wish list first, rather than looking to see how much money they have in the kitty before they go down that track. I have criticised that at length here, and I have criticised it publicly. I do not think it is the way that any organisation should operate—whether it is in the private, public or not-for-profit sector, and it is a matter of great concern. It should be a matter of great concern for South Australians that many councils, but not all, go about their budget-setting strategies in that way, and I remain very critical of that.

Because of that concern, I have been a strong and vocal advocate for council rate capping to be initiated in South Australia. It has been the Liberal Party's policy for several years to initiate rate capping should we form government, and it was announced shortly before the 2014 election that we would explore that. We renewed that commitment following the 2014 election, and we were able to undertake an inquiry through the Economic and Finance Committee, which I sit on, to investigate the impacts of rate capping in the local government sector. It was interesting to be part of that inquiry; there were clearly very mixed views.

Many of those who came to our committee and provided evidence were from the local government sector. Many councils were represented, through their senior staff or mayors, and the Local Government Association was certainly represented. It is fair to say that they have a strong position against rate capping—but they would, wouldn't they, because clearly they do not want to be told that they have to rein in their spending and to find efficiencies. They have to work better with what they have, and they have to cut their cloth accordingly. They have put forward a position that they do not support rate capping, but there are plenty of people out there in the community who do.

A number of people fronted the Economic and Finance Committee investigation and provided evidence in support of the rate capping policy. In particular, the Mayor of the City of Unley, Lachlan Clyne, spoke out in favour of rate capping, and there were a number of other people—I recall Councillor Martin Bray from the City of Onkaparinga, another elected member. I have spoken to elected members and senior staff within councils who did not come forward to the committee but who do support rate capping, and it is certainly not a 100 per cent position out there in the local government sector that this is a bad thing. Why would we cap council rates? Primarily, because it would help reduce a cost-of-living pressure that South Australian households are facing.

Too often, the largest bill a household will receive, the largest single bill in any given year, will be their local government rates bill, and those bills keep on rising year on year well above inflation in too many council areas. That is a significant cost-of-living pressure at a time when utilities are rising, at a time when fees and charges across government departments are rising, with the emergency services levy being doubled, or trebled, or quadrupled in the case of many South Australian households. We need to look at any opportunity we can to reduce the cost burden facing South Australian households, and we should not forget that local government imposes part of that cost burden, and that is through their imposition of council rates.

Local government has to be part of the solution as well, so it is timely to have the local government bill open at this time. It provides an opportunity for the Liberal Party to put forward its position in terms of rate capping and its desire to see the local government sector do its bit to reduce the cost pressures imposed by local councils with regard to unreasonable, year-on-year, higher than inflation increases to council rates. The Liberal Party's position is nuanced. It is not—

The DEPUTY SPEAKER: Before I let you go on, member for Bright, you might not have been in the chamber a bit earlier when we discussed the actual scope of this bill. Perhaps you were not here when we spoke about it, but it is actually about the boundary adjustments per se. If you want to talk about rate capping, it is contingent upon the member for Unley's motion afterwards. By the look on your face, you know exactly what I am talking about, so I do not have to tell you again, do I?

Mr SPEIRS: Just taking the opportunity to represent my constituents, Deputy Speaker.

The DEPUTY SPEAKER: You know exactly what I am talking about. In your exposed position, do not make me look at you again.

Mr SPEIRS: I do feel rather exposed out here on a limb, but I will return to the substance, having put on the record my strong support for the introduction of a cap on council rates. With my remaining time, I will now start to reflect on the boundaries of the local councils which I represent, those being the City of Marion and the City of Holdfast Bay.

Although historically it has been quite difficult, it should be easier for councils to amend their boundaries or for communities to initiate boundary changes when they think that these are sensible options. I know the minister agrees because we have this legislation before us. In my own community, the City of Holdfast Bay and the City of Marion share a boundary, both in the northern part of my community and also along the eastern boundary and southern parts of my electorate as well. I have a particular interest in the suitability of the council boundary that lies between the suburbs of Marino, Kingston Park and Seacliff Park.

We have a situation at the moment where the suburb of Seacliff Park is divided between two councils, with the southern side of Arthur Street being in the City of Marion and the northern side of Arthur Street being in the City of Holdfast Bay. The suburb being divided across two councils really does not make any sense. That is on the east side of Ocean Boulevard. If you move onto the western side of Ocean Boulevard, you have a subdivision within Seacliff Park, which is also found wholly within the City of Marion.

Beside the subdivision, which is known as Oceana, there is a large area of brownfield industrial land, which has a long history of being rezoned. I hope that will be signed off in 2017 and stimulate the South Australian economy with a large development happening within that site. That site has a number of names. It can be known as Cement Hill. It can be known as the Lorenzin site or it is sometimes known as the Monier site, named after an old factory that was there. It is an ugly site. It is a blight on our landscape and it ought to be redeveloped. It is a perfect site for an urban renewal initiative.

The community is fully supportive of seeing that redevelopment go ahead, which is quite unique. It is also an ideal site for higher density, which obviously fits with much of the government's plans to see higher-density dwellings constructed in communities along the rail corridor. This site is a fairly comfortable walking distance from the Marino train station along the Seaford line. So, this site is an ideal site for urban renewal, redevelopment and higher density as well.

However, the rezoning of that site has been greatly complicated in that about three-quarters of that brownfield site lies within the City of Marion and about one quarter lies within the City of Holdfast Bay, and that has meant that the rezoning process has had to go through both councils in equal measure. The developer who owns that site has had to front up to both councils time and again through a very convoluted rezoning process.

As things currently stand, I hope that when that rezoning occurs—and, as I say, I hope that will occur during 2017 because it is a very positive project for my community and a very positive project for the South Australian construction sector—we will not be faced with the perverse situation where this site is divided between two councils. At this stage, there is a small shopping centre proposed within this redevelopment and, with the plans that I have seen, that shopping centre will be divided between two councils. That makes no sense at all and is a really good example of an area which I hope will benefit from the Local Government (Boundary Adjustment) Amendment Bill 2016.

The opportunity to realign that boundary and to ensure that that brownfield site and subsequent redevelopment are all within one council area also presents a broader opportunity to discuss how the other communities around that site are located within particular councils. It is my view and it is the view of many residents in the area—and I am certain that it would be the majority view of those communities—that there is a need to look at whether the suburb of Marino and part of the suburb of Seacliff Park, which are currently located within the City of Marion, ought to be moved, using this large redevelopment as a catalyst, into the City of Holdfast Bay.

The residents who live in Marino—which is inextricably linked to the suburb of Kingston Park—recreate in the City of Holdfast Bay, they shop in the City of Holdfast Bay and the natural gravitation for residents who are living in the suburb of Marino is into the City of Holdfast Bay. In fact, to exit the suburb of Marino, many of them have to drive into the City of Holdfast Bay to get out into the wider community. If the community supports it, it is my view that it makes sense for a future state government, once this legislation is passed and initiated, to have a conversation with the residents of Marino, the City of Holdfast Bay and the City of Marion as to the more appropriate geographical and socio-economic location of Marino going forward.

As I mentioned before, the suburb of Seacliff Park is awkwardly divided across Arthur Street, and it makes sense to have a conversation in the future about where the suburb of Seacliff Park should be located in terms of its local government jurisdiction. Again, because most residents would recreate and gravitate into the City of Holdfast Bay, to me it makes sense to see the suburb of Seacliff Park entirely located within the City of Holdfast Bay. Equally, it is my view that this new brownfield development, which is split between Marion and Holdfast Bay, should also be entirely located within the City of Holdfast Bay.

This also goes to the hip pocket of residents living in these suburbs, because the rates that people pay in the City of Holdfast Bay are substantially lower, for a number of historic reasons, than in the City of Marion. So, it is my view that the local residents—and it is not just my view, it is a fact—living in Marino and Seacliff Park would be far better off if they were located under the local government jurisdiction of the City of Holdfast Bay in the future. It would make sense for a range of reasons and also from a cost-of-living point of view.

With that discussion about the local situation within my electorate and the boundaries of the City of Holdfast Bay and the City of Marion, I would like to say that the Liberal Party broadly supports this legislation. We will be looking to make a couple of amendments. We would like to see the commencement date of the act be from 1 January 2018, as opposed to 1 January 2019, but we do provide broad support to this bill. As foreshadowed by the member for Unley and other speakers and as supported heartily by me, we will be attempting to amend this bill to enable a cap on local council rates.

Mr HUGHES (Giles) (17:25): I think it is appropriate that I get up and say a few words about this particular bill. I note the opposition's support for the bill, but I also note that they managed to get in a whole raft of comments before the moving of the amendment about rate capping. If, later in my discussion, I happen to float gently by the issue of rate capping, I am sure the Deputy Speaker will indulge me.

I think this is a worthwhile bill. It introduces a number of changes which I think are overdue. The salient points are, firstly, that the bill provides a simpler and broader initiation process, allowing for submissions for boundary change to be initiated by a single council, a minister, the parliament or the public. I think that degree of flexibility when it comes to how we can initiate change is welcomed.

Secondly, the bill introduces a streamlined assessment pathway for less significant boundary change proposals. Once again, I do not think there is any point in overburdening systems with complexities. If we can simplify things for these minor changes to take place, then we should do so. I take on board some of the comments made by the member for Hammond. Sometimes what appear to be relatively minor changes can have a set of cascading impacts. It is not always a straightforward process, but it gives us that opportunity to simplify the process and have a look at what we are doing.

Thirdly, the bill establishes an independent commission, which is a recommendation that came from the grants commission. I think that initiative is also worthwhile, as is an independent analysis by those people with the necessary expertise. I think we all agree that the core of the bill passes the common-sense test. I have a number of councils in my vast electorate. Most of the electorate is in the unincorporated area. Not many people live in those areas, but it is still an incredibly important part of the electorate. Responsibility for those unincorporated areas lies, to a degree, with the Outback Communities Authority, so what we are discussing here is irrelevant to those areas.

There is some clear relevance to the councils in my electorate, but nowhere near to the same degree as in the metropolitan area and those more settled parts of our state. I have the District Council of Kimba and the Flinders Ranges Council area. I have the District Council of Coober Pedy, the most northern of our councils in this state, and the biggest council of Whyalla.

Also within my electorate is that anomaly, if you like, of Roxby Downs. Roxby Downs does not have an elected council because it is a creature of the Olympic Dam indenture. It has been an organisation or a council, if you like, that has attracted some criticism over the years, given it is set up with an administrator that has some very significant powers. I am pleased to see some of the reforms that are taking place, and I am also pleased to see the extension to the contract of the current administrator who, in my view and I think in the view of quite a few people in Roxby Downs, is doing a good job.

We can put Roxby Downs to one side because it comes under the indenture. I sometimes get the perception that the Coober Pedy council does struggle, given the turnover in CEOs and mayors. They have a very small population base and not a huge number of people turn out to vote. There are some real challenges for a council in an isolated location like that in providing the sorts of services that people come to expect. When it comes to boundary amalgamations, they have absolutely nobody they can amalgamate with. Their nearest council—and, as I said, this place is an anomaly—is Roxby Downs, and that is a four-hour drive or so from Coober Pedy. They have absolutely nobody they could amalgamate with.

The last time Whyalla council looked at restructuring a few years ago, we put out the feelers to some of those smaller councils on Eyre Peninsula and to Iron Knob in the unincorporated area. Whyalla and Iron Knob mutually agreed that we did not want to amalgamate, and I think that was a very sensible approach for a whole range of reasons on the part of the Iron Knob and Whyalla communities. The councils on Eyre Peninsula have their own distinct communities of interest, so it did not make much sense.

The one council area that has done a little bit of work on changing its approach has been he Flinders Ranges Council. They were looking at an interesting model, and I will have to catch up to see the progress on that. They looked at having Port Augusta take over their administrative functions while retaining a local democratic governance. So you would still have the people of Quorn, Hawker and the surrounding areas electing a council and making decisions on behalf of their community, but you would outsource those administrative functions to a much bigger council which has that economy of scale. In some places, if it is fit for purpose, I think that might be a good, effective model.

Mr Griffiths: I did that in the Mid North in 1996.

Mr HUGHES: I am sure you were an excellent CEO. In response to some of the comments made about the member for Frome when he was mayor, and about the member for Light, I will be talking about your role when you were on the council at Goyder and the rate increases. I might as well get onto that now. I want to put this in some context because this is not about the opposition having a go at the member for Frome and the member for Light, which I actually think is pretty poor form. I have a far more nuanced approach to the issue of rate increases.

I know that after the removal of rate capping, Yorke Peninsula Council had some very significant rate increases. These were out of keeping with the parcel of goods that local councils use to look at their inflationary pressures and were significantly higher than the CPI. In mentioning that, I do so in a way not to score a point or get back at the opposition for the naming of the member for Frome and the member for Light. My exercise is a different one. I will qualify the statement: the CEO is ultimately not the person who determines the rate increase; the elected council does that. We all know that the CEO and the administration plays an important role in budget formation and makes recommendation, but ultimately, it is up to the elected members to decide.

I will say, in defence of the member for Frome when he was the mayor, and the member for Light when he was the mayor of his council, that it is not the mayors who make the decisions. Obviously they are involved in the process, but mayors do not have deliberative votes, so it is ultimately up to the council to determine what the rate increase is going to be.

Having highlighted that Yorke Peninsula Council had significant increases, a number of other councils did as well. You have to look at the context, you have to look at the individual circumstances of any given council. I will give an example of when I was on the Whyalla council in my much younger years, when we started some significant rate increases. When you looked at the rate increases over an extended period of time from the commencement of council in Whyalla in 1971, a lot of the early councils patted themselves on the back for not increasing rates. They thought they were doing a great job. They failed utterly to take into account the decay in the physical assets that they held in their trust. As result of what they did there had to be some significant rate increases.

A lot of councils in this state do face serious challenges when it comes to infrastructure backlogs. We know from the example in New South Wales, where rate capping was introduced, that there is a very large infrastructure backlog. We also know that user charges in New South Wales, because of rate capping, are significantly higher than in South Australia. In fact, 36 per cent of total revenue in New South Wales in most councils comes from user pays. In a number of ways that is an incredibly regressive form of raising revenue.

That is not to say that user pays does not have a role to play, but if it becomes a big role it ends up being very regressive and being an impost on the most socio-economically disadvantaged people in the community. So 36 per cent of total revenue raised in New South Wales is as a result of user pays, which is a direct result of rate capping. When you look at South Australia 18 per cent of revenue by councils is raised by user charges.

There are other examples I can point to, and once again I will use Whyalla as an example. When I was on council, there were some significant rate increases during the period of the mining boom. One of the issues we had was retaining staff. We had a range of staff, outdoor staff and others, who had transferable skills—

Members interjecting:

The DEPUTY SPEAKER: Order on my left! I can hardly hear the member for Giles.

Mr HUGHES: It is riveting. They had transferable skills that were sought after by the mining industry, and we had the mining community in our community cheek and jowl. We had people out in the Middleback Ranges whose pay increased very significantly, we had people down the road at Olympic Dam whose pay was significantly higher. In order to retain staff that decision had to be made. We could not match what the mining industry was doing, but we had to increase pay and improve our conditions. That does have an impact on rates.

My view is that rate capping is an incredibly crude tool. It is easy to package up in a way that can make it something popular. Who likes paying rates, who likes paying taxes, who likes doing this or that? The simple fact is that there is a whole range of services that governments at all levels provide, and that the community expect, that have to be supported one way or another.

I am up-front that I am not a big fan of minimising government because I think it ultimately leads to very poor results for the nature of the communities we live in. In fact, when you look at the countries that put this on a national and global scale, and at the countries that have the greatest tax take, they are usually those countries that rank consistently in the top five, six or seven countries in the world when it comes to the quality of the infrastructure they provide, the quality of the services they provide, the quality of their health systems, the quality of their educational systems.

My argument is that at the end of the day you get what you pay for. The societies that are generally the best to live in are those societies that are relatively egalitarian with really high-quality services. Australia is a good country to live in. We have not fully moved away from that egalitarian ethos, even though we are well on track to move away from it. There are always those people who will argue that government should be smaller and it should be minimalist government, but we know that the results of that in the long run are not positive results for the vast majority of the people who live in any society. With those few words, I commend this bill to the house.

Debate adjourned on motion of Hon. T.R. Kenyon.

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