Rate capping | China’s National Sword | Repealing of the Natural Resources Management Act 2004 | Schemes Review | Member Survey No Images? Click here Vol 3: Issue 15 - Monday 23 April 2018 This week we remember the thousands of men and women who have served – and are serving - in Australia’s armed forces. We are grateful for the sacrifices they’ve made for our country, and our thoughts are with those who are currently serving in conflicts abroad, may they all come home safely. LGA President Mayor Lorraine Rosenberg Rate cappingIt was disappointing to read the Minister’s rhetoric today regarding council rate increases. Despite what the Minister and other purveyors of populist policies may think, councils do not “gouge” their ratepayers – they listen to them about local priorities and then set their rates to deliver a responsible budget. And contrary to popular opinion, councils don’t come up with long wish lists of projects and then calculate the rates needed to pay for them all. The budget setting process requires us to prioritise and make tough decisions about what gets funded and what doesn’t each year. Unlike state and federal governments - where budget decisions are made behind closed cabinet doors - councils make these tough decisions in meetings open to the public. However, councils also face a range of external cost pressures – including cost shifting from the State Government – that continue to place pressure on their budgets. Between 2002 and 2016 the cost of electricity in South Australia increased 146%, while the cost of water rose by 121%. The State Government’s own Solid Waste Levy has skyrocketed from $5 a tonne in 2003/04 to $87 – and is scheduled to hit $100 in a few months’ time. That’s a whopping 1900% increase! According to ABS data, SA had the second lowest increase in council rates in Australia between 2006 and 2016, behind only NSW. In fact, these ABS figures also show that state government land taxes increased 72% over this period, and motor vehicle taxes by 56%, so it’s disingenuous to suggest that the State Government has kept its tax increases lower than councils. As I’ve mentioned before, local government collects just 4% of all taxes, and the average rates increase across both metropolitan and regional SA this year was just $44. SA councils raise the lowest revenue per capita in Australia. Any discussion around rate capping should include the full range of data available, and acknowledge the significant and external cost pressures on councils that are out of their control. Rate capping is costing $2 million a year to implement in Victoria – this is funding that would be better spent on a comprehensive bench marking system for our sector that would drive efficiencies and enhance community access to information, while still supporting local decision making. The LGA will continue to advocate for sensible, evidence-based reforms for local government that don’t undermine the independence of our sector, or preclude councils from raising the revenue they need to provide the services and facilities communities need. China’s National SwordThe LGA continues to work with both the waste sector and state government agencies to address the impact of China’s National Sword policy. We understand many councils are already facing cost increases, and the LGA has commissioned a market analysis report to properly understand the risks and impacts across the entire sector. This should be completed in the next two weeks, and we will then approach the Government with a proposal for a support package. However, we have already asked the Government to start by freezing scheduled increases to the Solid Waste Levy, and releasing funds previously collected and sitting in the Green Industry Fund. As a result of their new National Sword policy, China is no longer a viable market for Australia’s recyclates, and this is having a significant impact on the recycling market in SA and around the country. It means that – without intervention – some South Australian councils will increasingly have to pay to dispose of their recycling materials, rather than selling them. This will put additional pressure on council budgets, and therefore rates increases. Last week the Waste Management Association of Australia (SA Branch) called for a $7.2 million support package from the State Government. To date, both the Victorian ($13 million) and NSW ($47 million) governments have committed funding support to help address the issue. While there’s an immediate financial impact that needs to be addressed, we have to consider the opportunities for short, medium and long term solutions. One opportunity that we are looking at is whether we can open up new markets for recyclates by changing our sector’s procurement policies to give preference to products manufactured from recycled materials. Like cost shifting and rising energy prices, China’s National Sword policy is yet another external pressure on councils that is out of their control, and shows why councils need to have the flexibility to set their own budgets. Repealing of the Natural Resources Management Act 2004The new Minister for Environment and Water the Hon David Speirs MP has informed the LGA that he has issued instructions to Parliamentary Council to commence the process of repealing the Natural Resources Management Act 2004, and will replace it with a new Landscapes South Australia Act. The Minister has indicated that he wants the new Act to have a focus on enabling stronger partnerships and increased community involvement, and a key element will be the creation of Landscape Boards and Green Adelaide. The LGA looks forward to working with the new Government on this important piece of legislation, and we will be advocating for the State Government itself to collect any levies that are established through the Act, given the clear feedback from members that councils should not be responsible for collecting revenue on behalf of the state and the government’s pre-election commitment to stop cost shifting. Schemes ReviewYou might have seen recent media coverage around a potential class action from councils against JLT. We understand JLT are working on a communication to send to councils, but in the meantime they’ve provided a response which you can view here. As you are aware the LGA has been working towards a restructure of the LGAMLS and LGAWCS to address the recommendations of both the Auditor General and the Finity / Batt report we commissioned into the Schemes. We expect to announce the results of these negotiations in the near future. Member SurveyThank you to all of you who took the time to participate in our 2018 Member Survey. This survey is a valuable opportunity for us to hear about issues that are important to you, and where you want the LGA to invest its time and resources. We are currently working through the feedback we received, and I will share the results with you after they are presented to our Board meeting next month. For further information or to submit |