5.4.1.2 C ONTENIDO DE LAS EDITORIALES

The local government sector in Queensland completed a series of reforms throughout the 1990s which focused on improving efficiency. The Local Government Association of Queensland (LGAQ) also drove a series of reforms between 2000 and 2004 including establishing:

• an investment and planning alliance with the Main Roads Department via 15 Regional Road Groups across the State

• a new more cost-effective arrangements for insurance covering public liability and workers compensation premiums, and

• new IT cost effective procurement and management services.11

11

Further details on the LGAQ achievements between 2000 and 2004 are available at:

http://www.lgaq.asn.au/lgaq/general/LGAQ/Achievements2000-2004.pdf

This reform process is continuing with the structural arrangements of the local government sector in Queensland being re-evaluated in a joint initiative between the LGAQ and the Queensland Department of Local Government and Planning. Launched on 1 June 2005, the Size, Shape and Sustainability (SSS) program, aims to address the increased pressures on local government, impacting on its long-term sustainability and ability to effectively service its community and statutory obligations. Further details on SSS are contained in Text Box 1 above.

1.4.5 Western Australia

The Western Australian Local Government Association (WALGA) undertook a Systemic Sustainability Study to investigate ways of addressing the sustainability of the state’s 142 local councils facing a range of challenges including growing community demands and expectations, limited revenue bases.

One component of this study was an assessment of the current state of council finances in WA. The findings of this assessment indicate that 80 councils in WA require a substantial (ie greater then 10%) increase in their own-source revenue to eliminate their underlying operating deficits. On this basis the assessment concluded that some 83, or 58%, of WA councils were ‘unsustainable’ on the basis that substantial adjustments appear necessary in order for the long-term finances to be put on a sustainable footing going forward. These councils serve approximately 21% of the state’s resident

population.12

Other findings include:

• On average WA councils registered operating deficits in 2004-05 that amounted to 4.5% of their own-source revenue

• An infrastructure backlog of approximately $1.75 billion, or 14% of the total value of council non-financial assets, and

• the ‘unsustainable’ councils are mainly regionally located councils (93% of unsustainable councils representing 16% of the unsustainable council’s resident population). These councils typically represent most of the state’s smallest and declining population councils and point to structural problems.

The study reports that the underlying factors driving the adverse assessment include the prevalence of operating deficits and the tendency of councils with such deficits to also be developing substantial infrastructure backlogs. The study reported that these factors are symptomatic of the deficiencies in council spending as well as past cost shifting. The study also noted weaknesses in revenue policy frameworks and shortfalls in the level and escalation of grants from other governments.

12

WALGA 2006, Local Government Finances in Western Australia, June 2006 p vii and p 58

1.4.6 Victoria

Whilst Victoria has not been subject to a formalised sustainability inquiry similar to the Access led studies, the state and local governments are actively aware of the

sustainability issues facing the sector and have engaged in significant local government reform over the past decade. Major reform and restructure of the local government sector was initiated in the early 1990s under the Kennett Government. Victoria engaged in major reform process of council amalgamations, which decreased the number of councils from 210 to 78. Consequently, the average population of Victorian councils per capita is now 62,700, which is the highest nationally.

Another key reform agenda in the early 1990s was the introduction of compulsory competitive tendering (CCT) which exposed the cost of providing services to competitive pressures and played a critical role in improving the efficiency, and hence, financial sustainability of local government. CCT forced councils to benchmark themselves against the performance standards of the private sector by placing a range of their services and operations out to public tender. When first introduced the CCT policy required 30% of local government services to be tendered, which then incrementally increased until 50% of services were tendered. However, due to the perceived

inflexibility of the CCT policy it was repealed in 1999 and replaced with the ‘Best Value’ policy. The objective of this latter policy was focused on councils’ obligation to ensure they seek the best value in providing services, through a whole of organisation approach.

This process of local government reform provided the impetus for ongoing work to improve the financial practices of the sector in Victoria, particularly around effective asset management. A collaborative approach between the Local Government Division of the Department for Victorian Communities (DVC), with local government peak bodies, the Municipal Association of Victoria (MAV) and the Local Government Professionals have been instrumental in driving improvements in asset management. The Sustaining Local Assets policy framework was released in December 2003 to provide an overall guide the strategic management of council infrastructure assets such as local roads, bridges, public libraries and recreational facilities.

This policy draws on the following two important concurrent programs:

• MAV Step Program: developed in 2003 provides individual assessment, expert advice and mentoring to councils to build its infrastructure asset management capacity and application of asset management principles. Three core strategies are used:

− awareness raising − providing tools

− self assessment and improvement framework

(Further details on the Step Program are contained below in Text Box 12 in section 2.8), and

• DVC Asset Management Performance Measures Project: developed a methodology to improve data collection and reporting to enable councils to measure their own performance in the management of infrastructure assets.

The financial viability and long-term sustainability of the local government sector are key focuses of MAV’s policy programs and activities. For example, the MAV Asset Renewal Gap Program focuses on ensuring the appropriate quality and capture of relevant asset management data, in response to the questionable quality and integrity of data of many councils. Some innovative work has also been completed by the MAV on developing a viability index of councils based on data on population, roads, rates growth, and mean personal income, which is discussed further in Section 5 of this report.

1.4.7 Northern Territory

Local government in the NT comprises 6 municipal and 30 community government councils; other organisations include 23 associations constituted under the Associations Incorporation Act, 3 associations incorporated under the Aboriginal Councils and Associations Act and one special purpose town, Jabiru, constituted under the Jabiru Town Development Act 1995.

Less than 5% of the land area of the NT is covered by local government and only 2% of the land area of the NT is rateable. Unlike local government in all other states, local government in the NT does not have the functions of planning (development assessment) or building regulation - the Territory Government retains these powers for all but

Aboriginal land where these powers are vested with Indigenous traditional owners.

Some 92% of the NT population reside within a local government area. The ten largest councils in the NT provide services to approximately 160,000 residents with the 55 other councils providing for approximately 31,000 residents and the remaining 6000 residents being without a council (mining and tourist towns, pastoral properties). The average population serviced by non-municipal councils is 670.

It is understood that the NT Government is in the process of a major consolidation of councils. The emphasis is mainly on amalgamation of community or aboriginal councils with each other or existing councils to improve their capacity to deliver services to their community in an efficient, viable and sustainable way.

1.4.8 Tasmania

Local government in Tasmania comprises 29 councils covering some 484,700 residents13 or around 16,700 residents per council. Over the past six years, the Local Government Association of Tasmania has compiled a Key Performance Indicator (KPI) report on measuring council performance in Tasmania.

The KPI project aims to provide councils with a range of indicators to measure their organisational performance. In summary the KPI report aims to:

• enhance performance measurement by councils

• enable benchmarking and identification of best practice

• establish performance trends over time, and

13

ABS, Population estimate, March 2005

• improve accountability to the community.

The 2004-05 report contains five year comparison data from which there are a number of emerging trends:

• a consistent downward trend in the debt-service ratio on a statewide basis

• city councils are raising a greater proportion of their revenue from rates relative to the smaller councils, and smaller councils are more dependent on grants

• a consistent reduction in the level of rates outstanding at the end of the financial year. Most councils have a level of rates outstanding at less than 5%, and

• a general increase in the number of employees per 1000 population. This may reflect the complexity of an additional range of services being provided by local government.

The KPI project reports increased efforts by councils to work in partnership and in regional and sub-regional arrangements and physical resource sharing is growing. Information sharing and management is identified as an area of opportunity.

1.4.9 ACT

The majority of functions typically associated with local government are provided by the Department of Territory and Municipal Services within the ACT Government.

Due to the unique arrangements for the delivery of local government services in the ACT, the pressures facing local government in other jurisdictions are generally manifested differently within the ACT. The department essentially fulfils the role of a large

metropolitan council and is in a better position to take advantage of economies of scale that may not be available to small regional and rural councils in other jurisdictions. Because the provision of local government services is so different in the ACT, the territory is not covered in much of the analysis of this report.

The ACT Government is developing an Integrated Asset Management System to enable better prioritising and management of local government asset maintenance through the collection of location, asset type and asset condition data.

1.5

Snapshot of funding approaches in international