Local government ready to 'fire up' the economy

Local government's capacity to play a major role in advancing Australia's infrastructure needs has largely gone unnoticed in the budget, which also saw a decision to abolish the Council of Australian Governments (CoAG) Reform Council – something that should be of concern to local government across Australia.

According to new research by ACELG, local government builds, maintains and renews over $300 billion of infrastructure and assets nationally, with much of this occurring in regional and rural Australia. By comparison, the Federal Government holds $95 billion of infrastructure and assets.

This research demonstrates that the local government sector stands ready to help 'fire up' the economy following the Treasurer's call in Tuesday's budget speech: "…Mining and resources represent about ten per cent of our economy but two per cent of our employment. It has, however, done much of the heavy lifting over the decade. So now we need to fire up the rest of the economy."

It is relevant that the Treasurer pointed to the mining sector in his budget speech. According to the ACELG research, local government is a significant employer in rural and remote areas (19 per cent), behind agriculture (57 per cent) and mining (33 per cent) respectively, and second only behind mining (41 per cent) in regional areas as the biggest employer.

The budget outlines a central role for local government in firing up the economy and creating stronger and more resilient regions

Sustained cooperation, coordination and collaboration between the Federal Government and local governments will be crucial to creating new jobs in regional and rural Australia, and boosting economic growth.

It is truly remarkable that local government's contribution towards employment in regional and rural Australia, and the sector's capacity to build stronger and more resilient communities through its significant infrastructure portfolio, has largely gone unnoticed in the budget.

The employment capacity and infrastructure portfolio of local government positions the sector as an economic growth powerhouse for regional and rural Australia and its ability to get the economy moving.

The Treasurer correctly notes that most of the kilometres driven by the mining sector are on private roads, but the roads the miners use to get to a mine – along with the roads used by farmers, truck drivers and outback tourists who drive through regional and rural community areas – are all proudly built and maintained by local government.

Much of the infrastructure funding in the budget is devoted to large-scale urban road projects.

Local governments right across regional and rural Australia have the strategic capacity to assist the Federal Government effectively deliver the infrastructure commitments made to regional and rural communities. With the construction phase of the mining boom nearing an end, local government will be a key player in keeping local jobs in local communities.

The Council of Australian Governments (CoAG) Reform Council was established to monitor government reform efforts and coordinate how governments at all levels work together to address local impacts of reform in key policy areas.

The Reform Council has also been responsible for many recent and ground-breaking assessments that have been key to major local, state and federal reforms in complex policy areas such as housing affordability, land use planning, skills and workforce development, and water management.

The issues addressed by the council are most felt, and best solved, locally. Whilst abolition of the Reform Council has largely gone unnoticed, this should be a concern for local communities everywhere.

Abolition of the council poses serious questions about how governments will coordinate and cooperate with each other to address the significant funding pressures outlined in the budget.

A guiding principle of the Reform Council has been that of subsidiarity. This principle acknowledges that tailoring services to meet the needs of people they directly affect is best achieved locally. Subsidiarity also acknowledges that complex policy reform matters should be dealt with by the lowest level of government practical.

It's not clear what forum remains to consider the impact of reform and tailoring of services to meet the needs of local communities. The upcoming Federation White Paper may provide an opportunity to build a new forum to consider these impacts.

Many of the Reform Council's reports have marked reform efforts on one of the key benefits of federalism – the ability to allow for distinctive approaches to local needs.

I know local governments right across Australia will get involved and represent the distinctive needs of their communities in this Federation White Paper process.

Local governments everywhere cooperate and collaborate to deliver the best outcomes for communities. Whilst the Reform Council's role in coordinating, encouraging cooperation and sharing good reform practice is now gone, local government will have an even more crucial role to play to ensure high local quality services can still be delivered to communities across Australia.