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Local Government Amendment (Fair Go Rates) Bill 2015

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Sam Hibbins MP
Member for Prahran
13 November 2015

Mr HIBBINS (Prahran) — The Kennett era continues here and it continues with this bill. The ghost of Kennett arises! The curse of Kennett has gone from Hawthorn down to local governments now. We know the effects of Kennett's rate capping, the effects in the past with infrastructure backlog and the inability of councils to deliver core services, and now it returns.

The Local Government Amendment (Fair Go Rates) Bill 2015 is an attack on local communities. It is an attack on democracy. It is an attack on the finances of local governments, the services and the infrastructure they provide and on those who are most in need and rely on the services local governments provide. This bill allows the minister to set a cap on increases in rate revenue that can be levied in one financial year. It allows a council to apply for a variation to the cap and it stipulates that rate capping is to be based on CPI. The Greens support well-managed local councils that are efficiently delivering for their community, but we oppose this bill with its lack of transparency and the significant constraints imposed on councils to deliver for their community, particularly those in regional and rural areas, and we are seriously concerned about the impact this will have on services and infrastructure in the local community.

Harking back to the member for Ivanhoe's comments in the debate on the government business program, he essentially said the Greens are subservient to local government, that we are beholden to local government — that nefarious group of individuals who are looking to deliver services to their local community or trying to make their communities more livable. I would suggest, if you are looking at cost-of-living effects, I would look at taking on the gambling industry and looking at the potential effect it has on low-income earners out there in communities.

The Greens will continue to support councils being able to prepare budgets, as they do in consultation with their local constituents without being subject to this bureaucratic intervention from state government. Unlike state and federal governments, local councils invite formal submissions to their budgets. They put their draft budget out for consultation. It is adopted at an open council meeting with the opportunity for amendment — not just handed down from above, like a state budget. We are in a climate now where we have cutbacks to local governments and reduced funding from federal to state government.

I refer to the fact that the government is concerned about cuts to local government and is concerned about the impact on government bottom lines, because live off the Twitter feed there is a media release under the heading 'Federal government cuts cost Victoria's local councils $118 million':

The tabling of the Victoria Grants Commission's annual report has revealed the damage inflicted by the federal coalition government's cuts to funding for local councils.

The government is concerned about cuts from the federal government and concerned about council's bottom line, but here it is pulling the rug from underneath them and denying them the ability to set rates and to gain revenue that suits the needs of local communities. This rate cap poses a real risk of severe cuts to council services and will hit many communities hard. Local governments are on the front line of delivering for our local communities. They are making our communities livable and providing the essential services that so many rely on.

In the Prahran electorate, we have three councils: Stonnington City Council, where I was a councillor for two years prior to joining this place.

Mr Richardson interjected.

Mr HIBBINS — No. Actually I replaced him in the subsequent election, so our paths did not cross, unfortunately. I am not sure who was more relieved that he was no longer a South Ward councillor, himself or the residents!

We have also got Port Phillip City Council and Melbourne City Council there in South Yarra. I am familiar with Stonnington City Council. It is delivering good things for its community — big things such as the Chapel Street master plan; the open space strategy, creating more open spaces; the Cato Street open space and the undergrounding of the car park; the implementation of the bike strategy; and the Yarra River biodiversity project. These are big, significant, major projects that will benefit not only the local community but all residents of Melbourne and our state. All councils are also delivering social services and community services to those most in need. They are involved in strategic planning — they are on the front line of all our planning decisions and setting our planning laws — community advocacy and sustainability initiatives. Councils are doing great things, and they need to be supported to be able to do that.

We are concerned that this rate cut is pegged at CPI, which does not reflect the cost of government. We are concerned that the CPI is not reasonable. It does not reflect the unavoidable cost pressures that are faced by local government. We have got rural councils with roads of significant length that have far higher costs. We have got other impacts — wage increases, the implementation of high-quality local infrastructure and basic services. Councils are doing that heavy lifting, yet this government is essentially making — I think, if you add up the sums for Stonnington — a million-dollar cut to local budgets.

In this amendment the minister may oppose a rate cap on all councils, a class of councils or a specified council. Look, if you are going to provide a rate cap, if you are going to have this legislation for a rate cap, it is good that you would have flexibility in that rate capping. It is not a one-size-fits-all approach. It is important, if the minister is going to go down this route, that the government consult with the local community, that the local government sector have confidence in this process, that there is transparency and disclosure in this process and that the local governments can have confidence that the rate cap set at least gives consideration to their individual needs.

There is a process in which councils can apply for a variation, which is essentially an appeal against the rate cap set. But the time lines, I think, are difficult to meet and problematic. We have got the minister setting the rate cap by 31 December. The council must advise the Essential Services Commission (ESC) by the end of January of an intention to apply. The council must apply for a variation by 31 March. The Essential Services Commission takes two months then to make a decision, so essentially we are going to see councils needing to run two budgets for their community consultation: one whilst awaiting a decision by the ESC, one budget based on whether their variation is successful, another if it is not.

We have also got a fee that needs to be paid, which could even essentially put this process out of reach or make it not worthwhile for some councils. We have also got the fact that wages are rising, and that is not taking into account this CPI-based cap. New South Wales has already introduced rate caps, and a general standing committee of the New South Wales Parliament has recently released a report highlighting the infrastructure backlogs, the underspending on asset maintenance, the operating deficits, and the report concludes that there needs to be reform to this area. Communities should be able to decide the level of services provided by their local council and the rates they are willing to pay for such services.

I would have been hopeful that we would have been joined by the coalition in our opposition to this bill, particularly by The Nationals given that this rate capping will have the effect that this will have on rural and regional councils. Having very intently listened to the contribution by the member for Gippsland East, I can tell members that I am pretty confused as to which way they will be voting on this particular bill. What we have seen from coalition members, from the Liberals, is an absolutely shameless performance on this particular bill. One day you have got the shadow Minister for Local Government going out there, telling rural communities how terrible the effects of rate capping will be on their communities and crying crocodile tears. Then the next day they are saying it is a broken promise because the government has not cut rates further. They are urging further cuts and to have them sooner. They are making a weathervane look like the Rock of Gibraltar. This is absolutely appalling.

We need a government and an opposition and all parties to not just support local government but absolutely champion local government. We need members who will stand up for their local communities. So much of what can make our communities great, what can make them livable, is administered by local government. We are all very well at advocating for our community and seeing what else needs to be done in our community to make it better — no matter at what the level of government — but are we going to go and tell these local councils where they should cut? Are we going to go and tell the Moreland and Yarra councils? Are the local members there going to tell them where they should cut their services? Are we going to tell Stonnington and Darebin where they are going to cut their services, or Boroondara or Bayside? Where are we going to tell them to cut?

Basic services are going to be the big projects. Are we going to see councils having to raise their debt just to service their basic council needs? We do not need a government that is intent on exerting its power, rate capping — or let us call it kneecapping — local councils in their ability to provide for their community?

Honourable members interjecting.

Mr HIBBINS — You like that one? With the massive population growth in Melbourne councils need to be able to invest in infrastructure and services. They need to be able to meet the needs of their local community. The Greens oppose this bill.

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Sam Hibbins MP
Member for Prahran
13 November 2015




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