House debates

Monday, 14 July 2014


Local Government

10:31 am

Photo of Anthony AlbaneseAnthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | | Hansard source

I move:

That this House:

(1)   condemns:

(a)   the decision by the Government to freeze indexation of Financial Assistance Grants to local governments across Australia;

(b)   the resulting cuts to local government funding of $925 million over the next four years, affecting every council in Australia; and

(c)   the failure of the:

(i)   Minister for Infrastructure and Regional Development to protect this critical funding to local governments across Australia; and

(ii)   National Party to stand up against the cuts on behalf of regional and remote councils, which are affected most by the freeze;

(2)   notes:

(a)   Financial Assistance Grants are used by every local government in Australia to maintain local roads and deliver critical community services;

(b)   the Government’s indexation freeze represents cuts of $925 million to local governments in every town and city over the next four years;

(c)   regional and remote councils will be most affected by the cuts, with larger service areas and more kilometres of roads to maintain per ratepayer;

(d)   the viability of some regional and remote councils may be compromised as a result of the cuts;

(e)   the pressure now on councils to increase council rates or cut services due to the cuts; and

(f)   within six years, the value of the cuts will be greater than the entire Roads to Recovery budget; and

(3)   calls upon the Government to:

(a)   listen to local government concerns about the impact of freezing indexation of Financial Assistance Grants on local roads and community services; and

(b)   immediately reverse the decision to freeze indexation of Financial Assistance Grants to local government over the next three years.

A sudden and significant change in government revenue can spell disaster for a government. It is something the previous Labor government learned firsthand after 2009, when the worst global financial upheaval since the Great Depression slashed government revenues across the board. Such a funding difficulty is about to befall the local councils of this nation, courtesy of the Prime Minister's decision to freeze financial assistance grants for the next three years and make that change permanent. Many will be forced to slash spending on road maintenance and other services, with implications for road safety, particularly in rural and regional areas.

This financial assistance grants decision represents a $925 million hammer blow to financial positions of councils across the nation. While all councils are affected, those that will bear the greatest burden are small councils in rural and regional areas, which on some reports rely on financial assistance grants for up to half of their annual income.

I moved the motion before us today because I want those opposite to reconsider this foolish decision. I want those opposite to talk to the mayors and shire presidents in their electorates and hear firsthand about the impact of this cut. I want to hear from those opposite, particularly from the Nationals, whose constituents will be most affected, about how on earth they could possibly support this budget move.

Before I go further, let me give you a real-life example that cuts to the heart of this issue. On 16 June the Mayor of Greater Geraldton, Ian Carpenter, told the ABC's AM program that he was worried about the effect of this decision on 15 small local government areas outside Geraldton. Mayor Carpenter said:

They'll become unsustainable. It's a very, very serious problem and I can't stress that enough. To take away the indexation is just crazy.

It is just crazy, Mayor Carpenter said, and he was right. He could not be any clearer, and his comments are being echoed around the nation by mayors of all political colours.

Councils now have three options, none of them attractive: increase rates, slash services or increase borrowing. Increased rates will place further pressure on family budgets. A reduction in services is likely to occur in road services and maintenance in particular, with real consequences, particularly in the bush. Last month's national assembly of the Australian Local Government Association was concerned enough to pass an urgent motion calling on the government to reverse its decision.

These cuts are also coming at a time when the government is already hitting local government with other budget measures. The head of the Local Government Association of Queensland, Greg Hallam, noted after the budget that the change came with the reintroduction of indexation of fuel excise—another move that will impact disproportionately on residents of rural and regional areas. Mr Hallam is right, but he left out another budget measure that will hurt councils—that is, the Prime Minister's move to claw back funding for states and local governments by ending the federal government's contribution to the cost of providing rates discounts to pensioners.

So in fact it is a triple whammy. Just as this Prime Minister is piling cut after cut upon Australian families in areas like health, education, pensions and child care, he is also piling cut after cut onto councils. When you pile up the cumulative effect of all three, it is clear the councils of Australia are paying a higher price than they should for this Prime Minister's political agenda.

In Queensland the Bundaberg Shire Council in the electorate of Hinkler has revealed that the decision on FAGs will turn what is expected to be a modest surplus this year into a $5 million deficit because of the decision to stop paying them money in advance. This comes on top of the fact that the Prime Minister also cut the money that was allocated to local government to every council area through the Regional Development Australia Fund when they came to office. It comes on top of the disbandment of the Urban Policy Forum and the Australian Council of Local Government and on top of their abandonment of constitutional recognition of local government, which had the support of the then shadow minister Barnaby Joyce but the bipartisanship of which the Liberal and National parties walked away from prior to the last election.

I am asking this parliament to send the Prime Minister a very clear message on financial assistance grants. That message is: think again. I commend the motion to the House.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

Is the motion seconded?

Photo of Julie CollinsJulie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | | Hansard source

I second the motion.

10:36 am

Photo of Dan TehanDan Tehan (Wannon, Liberal Party) Share this | | Hansard source

In this discussion we are having here this morning it is wonderful to see the opposition shadow minister in here pleading on behalf of councils, but what he had failed to mention is the reason why we are here. The reason why we are here is because the shadow minister as a cabinet minister in the last government saw this nation rack up levels of debt that we have never seen. We saw a government spend money at record levels like it had never been spent. What happened at the last election which the shadow minister does not seem to understand is the Australian people voted with their feet to let the reckless spending stop. They put a mature government in place to ensure that we could get the nation's finances back under control. This government has started this process.

As part of that process we have had to make some tough decisions and we have asked everyone to do their little bit. As difficult as it may be, we have had to ask local government to do their bit. I say to the shadow minister that I have explained that to all the mayors in my electorate, and they understand the mess that we have been left. They understand that everyone has to do their little bit. Sure, they would have preferred if we had not made the decisions that we have had to, but they understand that the burden needed to be shared.

But what we have also done—and this will be a benefit to local government—that the shadow minister did not mention is give them savings as a result of the abolition of the carbon tax, which also hit their budgets. Hopefully, by the end of today there will be positive news for our local governments, with the carbon tax having been abolished and savings going back to council as a result of that measure.

We also have announced payments to the most important pieces of infrastructure that we have in local government areas: our road network. They are significant announcements for our road networks, including an extra $350 million to the popular Roads to Recovery Programme. As a matter of fact, I do not think in country Australia there is a more popular program than the Roads to Recovery Programme. In 2015-16 an additional $350 million will go to local government areas.

We are also announcing an extra $100 million in both 2015-16 and 2016-17 for the Black Spot Programme. Not only are we announcing that additional $100 million in each of those financial years; there is a change in the criteria which will make it easier for those local governments in regional and rural areas to get access to that funding. The criteria had been skewed more and more to assisting those local government areas that were in outer metropolitan areas. So we have rebalanced the way we look at that program to make it more beneficial and easier for local governments in regional and rural areas to get that funding.

We have also announced $300 million in the Bridges Renewal Programme. That is an additional $300 million in this new program which will go to regional and rural local government areas to help them renew bridges—wooden bridges that need fixing to make sure that the more modern heavy transport will be able to use those bridges, which will be productivity enhancing not only for those local government areas but for the nation as a whole. So those three key mechanisms to deliver more money into local government areas for road and bridges infrastructure are absolutely vital to those local government areas.

We wish that we did not have to make the decision we had to with regard to freezing the FAGs grants, but we have done it because it was needed. All I can say to those opposite: the only reason we did it was because of your poor financial management. (Time expired)

10:41 am

Photo of Julie CollinsJulie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | | Hansard source

Financial assistance grants to councils are very, very important indeed. The councils know this. I think they would be very disappointed with the last speaker who came in here and said, 'Oh, yeah, we don't really want to do this, but it's all Labor's fault.' I do not see how it can be when they are bringing in at least a $22-billion Paid Parental Leave scheme whilst they are cutting important money from councils that councils are using on roads, bridges and on other programs in their communities for the elderly, young kids, youth workers—a whole range of important programs out there in the community. They are cutting those at the expense of introducing a $22-billion Paid Parental Leave scheme. It just doesn't add up. To come in here and blame Labor for their decision to cut almost $1 billion out of local government over four years just shows that they have the wrong priorities.

What is even more concerning about this decision is that they did not consult with councils before they did it. They did not consult with councils at all before making this decision. Then, of course, they did not tell councils until budget night, when many councils across the country had already locked in their budgets. As we heard from the former shadow minister, it has left councils in a very precarious position indeed whether having to make some very, very tough decisions—decisions to cut services, to cut staff, to increase their borrowings or to put up the rates that bit further. We know, of course, that that will impact on every household right across the country. Every household right across the country will be affected by this government's decision to cut Financial Assistance Grants, to cut almost $1 billion over four years out of local government. We should not be surprised by this, because they are true to form. They have been cutting money from local councils with their RDAF round 5 funding—$250 million ripped out of councils right across the country. This is, indeed, very concerning for councils. It is so concerning that the Australian Local Government Association has actually written to all their mayors saying how concerned they are about it. In fact, they are saying that they $925 million in Financial Assistance Grants reductions by 2017-18 will continue beyond that date, because, of course, the base level of FAGs will be permanently reduced by over 12 per cent. So it is not just going to affect councils over the next four years but this freeze in indexation is going to affect the councils for decades to come.

We had the previous member talk about the Roads to Recovery funding. ALGA had something to say about that, too. They said that by 2018-19, when the current extension of the Roads to Recovery is due to end, the loss of the Financial Assistance Grants will be equivalent to 95 per cent of the Roads to Recovery funding. Almost the entire value of the Roads to Recovery program will be lost by this one measure in freezing the indexation under the Financial Assistance Grants. So to come out here and say, 'But that is all okay because we've got Roads to Recovery.' It is not okay. Councils do not think it is okay and councils right across the country are saying it is not okay. It is not okay to have this cut on councils right across the country, affecting every household in the country with reduced services, increased rates or increased borrowings by their local government association.

Councils have already cut staff—in fact, they did it two weeks ago—because they did not know about this decision from the federal government, because, as I said, there was no consultation. We already have people who are unemployed because of this government's decision which came with no notice whatsoever to councils. Every council across the country had already been talking about their future budgets, and now they have to adjust them for the next four years, because this government gave them no notice whatsoever of this cut.

Of course, this is true to form, because the government did not really support recognition of local government that was going to be put in the referendum last year. They came in here and voted for it, but then they changed their position on it. Clearly, they have cut money to local government. They do not support local government as a legitimate third tier of government—the level of government that is closest to the people and deals on a daily basis with people's most urgent needs. They should be ashamed of themselves for this cut—this cut of almost $1 billion over four years that will hurt families right across the country. Councils across the country are furious about this. They have been writing to me and other opposition members about how concerned they are about this funding cut. It is not okay to come into this place and say, 'It's all Labor's fault,' because it is not. Labor did not make the decision to cut this money; we would not have made this decision; and we certainly would not— (Time expired)

10:46 am

Photo of Mark CoultonMark Coulton (Parkes, National Party) Share this | | Hansard source

I, too, rise to speak on the motion brought to the House by the member for Grayndler. Before I start my comments, I might make mention of comments made by the previous speaker, particularly about the constitutional recognition of local government. The reason that that did not get up in the last term was the shambolic state of the government of that time. I was on the committee that looked into that and I can tell you that the coalition were in favour of constitutional recognition of local government. As a former mayor, I know better than most about that; the former minister was frustrated in not having enough time for that discussion to take place. At the critical moment, in one of the Rudd-Gillard changeovers—when there were mass sackings and the minister was sacked by the then Prime Minister—the referendum had absolutely no hope at all. We need to get our facts straight here: the reason it did not get up was the shambolic nature of the previous government.

I am also surprised that the previous speaker, the member for a regional area in Tasmania and a mother, would be opposed to a paid parental leave scheme that was going to be beneficial to mothers in her electorate who work in small businesses and on farms. I thought that supporting mothers into the workforce was something that the Labor Party actually supported; I did not realise it was something they opposed.

We need to talk about why we are at this point. Why did the government have to freeze the financial assistance grants to local government in the budget? If you look around Australia you will see the reasons: the amount of money that was squandered over the previous six years starting with the BER program. I have a school at Louth on the Darling River in the western part of my electorate which now has a classroom for each student—four students, four classrooms. They had four students, and the previous government bought them each a classroom. I guess they are the envy of other schools, but it would have been nice if they had spent that money in other areas. I have a builder in Moree who is owed $642,000 because of the mismanagement of that BER program. He is not likely to get his money. What has that done for the regional economy?

How about we talk about what the live cattle trade has done for regional Australia? The devastation that has caused to the finances of communities across regional Australia. The shadow minister has the hide to come in here and put this motion about what this government is doing to local government.

I might say that the coalition government next year will be doubling Roads to Recovery to those councils. In many of my councils that will actually have a positive net effect over the FAGs grants. We will be removing the carbon tax. Despite the fact that the Labor Party says they support the removal of the carbon tax, they do not seem to understand you actually have to vote for it in the Senate if you want something to be repealed. You cannot go out before an election and say, 'We support the repeal of the carbon tax; we don't believe in a carbon tax.'

Photo of Gai BrodtmannGai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | | Hansard source

Mr Deputy Speaker, I rise on a point of order. I wonder about the relevance of what the member is saying with regard to the motion we actually have in front of us. If you could bring it back to the Financial Assistance Grants package, that would be terrific.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

There is no point of order.

Photo of Mark CoultonMark Coulton (Parkes, National Party) Share this | | Hansard source

I thank the member for Canberra for her interjection. Just so we are perfectly clear: the relevance of my comments is the absolute squandering and irresponsible demolition of the Australian government's budget by the previous, Labor government. It has meant that this government has to make some tough decisions to get the budget back in line. That is the relevance of what I am saying here. I am pointing out the absolute stupidity of some of the programs that the previous government put in place. It was bad for regional Australia and squandered the money that was there.

I also say that next year we will fund $200 million a year that regional communities will be able to tap into for programs that will boost the economies of their area. The member for Grayndler has hide to bring this motion in. It is completely wrong.

10:51 am

Photo of Ed HusicEd Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | | Hansard source

You know the coalition is in trouble when on a resolution that discusses how the federal budget will impact on their local communities they have to talk about live exports and carbon tax. They know better than most—particularly if they have represented councils and are now in this chamber—the world of grief they are going to hit when those councils are squeezed and squeezed hard by this unprovoked decision of the Abbott government.

In modern financial terms, $900 million rolls off the tongue too quickly; but, when you talk to councils around the nation and say to them that you are going to rip $925 million from them, you find out in real terms what this means. Many local government bodies are already operating under heavy pressure. There is little or no fat in their operation, so you could imagine their surprise when they discovered in council chambers across the country when they were briefed that they would have their funds cut by the Abbott government—a cut inflicted when the Abbott government cruelly decided to freeze indexation on financial assistance grants.

What is disappointing yet not surprising is the way the Abbott government steamrolls its way through these decisions. You only have to ask the AMA if they were consulted about the GP tax. Of course they were not. Ask pensioners whether or not they were consulted about the brutal impacts of the budget. Of course not. In fact, they were told by the Prime Minister that there would be no changes to pensions. Ask motorists if they were given any warning that fuel tax indexation would return. There was none. What is ironic is the Abbott government has halted indexation for the funding of councils but has reintroduced indexation to help itself to the pockets and purses of Australian motorists. Under the guise of trying to respond to a self-manufactured 'budget emergency', the Prime Minister and the Treasurer—I cannot actually remember him anymore, because you never see him these days—have both been caught breaking promises, triggering protest across the country.

One of the farthest reaching yet not heavily advertised impacts of these broken promises was to freeze this grant indexation. The grants are not there for giggles; they are there for a reason. Rate payers look to their local council for the basics: libraries, parks, waste management, recreation facilities and roads—the vital bones of every thriving community—and the councils cannot always attend to these responsibilities on their own. They need the backing of state and federal government, which is why the financial assistance grants are provided. They are provided from a federal level to help councils undertake those things they could not undertake on their own. The Abbott government has told councils after they have done their sums and their budgets that they can no longer expect help in the form of that indexation. It is disgraceful from a government that said it would be a no-surprises government.

We have already seen the howling of state governments resulting from an $80 billion cut to hospitals and schools. New South Wales Premier Mike Baird has described it as 'a kick in the guts'. Now local governments are objecting. That is obviously because councils were not consulted at all about the indexation freeze and they had already put together their budgets for 2014-15, and then had this land in their laps.

The fallout for councils is that they have little choice other than to increase rates, cut services, increase borrowings or do a combination of all three—which is a horrifying prospect. It is a classic example of the Abbott government's twisted priorities that—as the member for Franklin pointed out—they can introduce a paid parental leave scheme which will see $50,000 handed out to the well-off but that people in remote parts of the country who depend on their council to provide services will be affected.

My local council in Blacktown—one of the biggest in New South Wales—estimates that it will lose $4.7 million over three years. This is a council that has already shut pools, is looking to privatise child care, is looking to cut back on its infrastructure spend and, importantly, has just announced an increase to council rates. In fact, last week it ratified a 5.3 per cent council rate increase. The Liberal-Independent council in Blacktown was so torn by this that the Independent, who is part of that coalition, voted against the rate increases. Imagine what it is going to be like when this $4.7 million hits this council on top of what they are already doing. I am genuinely concerned about the impact that will have on people in our area who have already seen one lot of rate rises, who are going to see more and who are potentially going to see an even harsher cutting of services at a time when they need it most. It is a disgraceful display of arrogance by this government to cut funds to councils that need this money to do the work required in local communities across the country.

10:56 am

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

I am very pleased to speak on this motion. You always know that it is serious when the member for Grayndler comes in here and does not plagiarise lines from a movie. I would have thought that Weekend at Bernie's IIwould have been a good start—you know, Albo, you're still dead. But I will compliment him on his choice of ties. It is a great colour for today. The member for Reid, I and the member for Grayndler are all wearing royal purple.

While I understand the misapprehension, the anguish and the feigned indignation from the member for Grayndler and others who have spoken on this, we went to the last election promising a series of things. We promised to axe the carbon tax—hopefully that will happen today; we promised to stop the boats and, pretty much, that has happened; we promised to build the roads of the 21st century, and you have seen our infrastructure program—we are getting on with business; and the last thing that we promised was to fix the budget mess. This is part of it, but this plays into two of the three major issues that we have to do with the federation white paper and the taxation white paper still to come.

The problem I find, when it comes to local government funding and funding agreements between state and federal, is that we tend to see that where the federal government comes in other levels of government can actually exit that space. We find that the federal government is backfilling and funding in these areas. Until we get that flow of funding correct and right, what you will see is that the more that the federal government puts in the less other governments will. I think when we get the federation white paper and we bring that down—when we sort out how COAG is supposed to work, what we are supposed to do in this space, where local government fits and how we get those things going—we will be better off. I note that in my electorate of Herbert the federal government has done a great job. We have brought road projects through such as the fixing of Dalrymple Road, the Ring Road and Vantassel Street. All these things are coming through from infrastructure spending.

The other issue I would like to bring up is not so much the funding but how we get value for funding. I was in Charters Towers with Senator Arthur Sinodinos. A local council there told us—and I do not know it for fact as I have not seen the paperwork—that they had a road project which they costed at $9 million. Because it was above the limit they had to go to national tender. A national tenderer won it at a cost of $27 million. They flew in their crew, they drove in their camp and they drove in their plant and equipment. The local council got their piece of road fixed at a cost of $27 million, $18 million more than they would have done it for themselves—and not even the pie shop got a lick out of it.

At the moment in Townsville there is a $120 million project underway, the joint logistics hub. It was brought forward under the previous Labor government. Baulderstone, the contractor, won the tender fair and square through the tender process as it stands. Their major subcontractor is Shamrock Civil Engineering, who are also a Brisbane based firm. Whilst the federal government can stand back and be very proud that we have $120 million of infrastructure going into the Townsville area, very few local tradesmen and very few local businesses are going to get a lick. The Hungry Jack's across the road is doing very well. They are even putting on more staff to cope with the blokes coming across the road. The pie van is doing okay there as well. But no local business, no local construction firm and no local contractors are getting a go at this money.

For us in the regions to get the full benefits we want to see from our infrastructure spend, the money wash through our economies. I am not saying we have to be protectionist on behalf of the regions and I am not saying that we should go for more expensive tenders or anything like that. The issue is how the tenders are structured between state and federal governments—that is what we need to address to allow that money to be spent correctly in the regions. There is an old saying that no public servant ever lost his job by awarding a job to John Holland, Teece or a company like that. If they give the job to a local contractor and something goes wrong, the answer is obvious: the big guys did not get it. What we have to do, through this Federation white paper, is look at how the tenders are structured. We need to make sure that, when we do infrastructure in our regions, when we do spend money—whether it be the $925 million they say has been cut or through fiscally responsible decisions—we look at the way this money is spent in our communities. Everyone would be upset if a Chinese firm were given a major project in Sydney. I do not see why we in the regions should be second-class citizens. I thank the House.

11:01 am

Photo of Alannah MactiernanAlannah Mactiernan (Perth, Australian Labor Party) Share this | | Hansard source

Local government in Western Australia will be losing $102.4 million as a result of this great surprise. We have been told by the Prime Minister, Mr Abbott, that this is the budget the community voted for. I can tell you that local government throughout Western Australia do not believe that they voted for this budget. There was no indication whatsoever that their funding would be cut.

There is a structure in place so that when political parties contest elections they have a clear indication of the state of the budget. So this idea that, after you come into parliament, you suddenly have no idea what the state of the budget is—and that that justifies you making all of these fundamental changes—is just complete rubbish. The state of the budget was absolutely known by the coalition before the election. Yet they made no mention of these really quite profound changes that are going to affect communities in Western Australia across the board—and which will have a particularly significant impact on small rural communities.

There are a number of communities that are dependent on these Financial Assistance Grants for 30 per cent or more of their local government income. These include Derby-West Kimberley, Dalwallinju, Karijini and Upper Gascoyne. Then there are places like Mount Marshall, Mukinbudin, Murchison and Koorda, all of which are dependent on Financial Assistance Grants for 50 per cent or more of their income. These grants play a very significant role in these communities. Quite understandably, then, the shires in these regional areas are immensely concerned about what has happened. Greg Powell, the CEO of the Shire of Merredin, had this to say:

Rural and remote communities are, in many cases, already struggling with declining populations, drought and other detrimental socio-economic factors. Placing the expectation on the local community to either cover the shortfall in funds or accept a decline in services is grossly unfair given that our local residents have already paid taxes to the Federal Government and expect an adequate level of that revenue to be returned to Councils to provide local services and infrastructure …

Mr Webster, the CEO of the Shire of Wagin, has said:

A decision like what has occurred will either increase shire rates & charges or reduce the services to the communities. It will also have a long term impact on programs that local government often undertake from these funds for their communities.

The impact is not confined only to those rural areas. It will also affect shires like Swan and Bayswater in my electorate. Francesca Lefante, who is the CEO of the City of Bayswater, had this to say:

The failure to index the FAGs will mean the City of Bayswater’s ability to provide services, such as libraries and family-oriented community facilities, will be put under great pressure as we struggle to meet the needs of a growing and ageing population. This is a blow for local communities already bearing the brunt of greatly increased charges for utilities and cuts to services in the areas of health, education and seniors’ concessions.

We have heard some interesting commentary today. The previous speaker, the member for Herbert—who at least did speak about local government and not about ties and live exports—even contested whether or not these Financial Assistance Grants were something that should be provided by the federal government. Financial Assistance Grants were first introduced in the mid-1970s by the Whitlam government. This was the first time the Commonwealth had ever directly recognised local government. The formula was then reset by the Keating government in the mid-1990s. The grants are a very clear recognition that the majority of taxation accrues to the federal government and that there must be a fair sharing of this revenue. The suggestion from the member for Herbert that the government may be looking at walking away from this is remarkable. (Time expired)

11:07 am

Photo of David GillespieDavid Gillespie (Lyne, National Party) Share this | | Hansard source

I rise to speak against this motion opposing the government's decision to freeze indexation of Financial Assistance Grants to local governments across Australia. As you and everyone in this House well knows, we have a huge accumulated federal deficit which needs to be addressed, and these changes to local government grants are a responsible reaction to that. But people are being selective about where these freezes are occurring, and the outcome of that, because they are being taken in isolation. At the same time as these indexation freezes were announced, an extra $350 million was put into the Roads to Recovery program and an extra $100 million, for two years in a row, was put into the Black Spots program. At the same time, $300 million was announced for the Bridges Renewal program, as well as $200 million for Heavy Vehicle Safety and Productivity improvements and $229 million to go into the national highway upgrade.

Why is this good for regional councils? The answer is that there is a distorted and disproportionate income differential between regional and metropolitan councils, and these changes to Roads to Recovery, Bridges Renewal and Black Spot funding benefit regional and rural councils more. Not all of the money in the FAGs grants is tied to roadwork, but with the Black Spot program and Roads to Recovery, we are getting funds tied to road building and road recovery activity, which is the biggest burden that these regional and rural councils—where the National Party has seats—have to face. To put things in perspective, the difference in population density makes a huge difference for metropolitan councils with rates and also developer contributions, as there is always more development going on in the metropolitan centres. The councils will have to make their own decisions on how they manage their money, but federal financial assistance grants are not their only source of income.

Some of my regional councils would love to be responsible for a total road area of 97 kilometres, which Strathfield Council has—whereas Port Macquarie has 1,312 kilometres to look after, without the rate base or developer contributions you see in Strathfield. It is of interest that Marrickville Council has a total of 216 kilometres, which ends up being 2.6 kilometres per thousand people, with a population density of 4,905 people per square kilometre—as opposed to Gloucester, which has something like 20 per square kilometre. So there is an inherent benefit to regional and rural councils through these changes, let alone in the Lyne Electorate, where we have announced $17.5 million for Bucketts Way, between Gloucester and Taree, and all the councils in my area that have very large numbers—

Photo of Bob BaldwinBob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | | Hansard source

It should have been between Port Stephens and Taree.

Photo of David GillespieDavid Gillespie (Lyne, National Party) Share this | | Hansard source

But the important bit that needs the work, as the member for Paterson understands, is between Gloucester and Taree—particularly down the Taree end. I am sure Gloucester Shire Council and Greater Taree City Council will welcome the $17.4 million they are getting for Bucketts Way, as well as the $10 million we have rolled over from an unsuccessful Northern Gateway project into the roads and bridges program so that Dickinson Bridge and other bridges in the area get the attention they deserve.

Photo of Anthony AlbaneseAnthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | | Hansard source

They took money off Taree.

Photo of David GillespieDavid Gillespie (Lyne, National Party) Share this | | Hansard source

The member needs to remember that this is a delivery on things that were promised four and five years ago that were never delivered by the previous government.

Photo of Anthony AlbaneseAnthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | | Hansard source

Like the Pacific Highway.

Photo of David GillespieDavid Gillespie (Lyne, National Party) Share this | | Hansard source

Yes—only $1.2 billion being spent on the Pacific Highway.(Time expired)

11:12 am

Photo of Justine ElliotJustine Elliot (Richmond, Australian Labor Party) Share this | | Hansard source

I rise today in support of the motion by the member for Grayndler, and I join with him in condemning the Abbott government in cutting the funding to local councils. In particular, I want to condemn the National Party for these cruel cuts. Indeed, the National Party should be ashamed of their slashing of vital funding for our local councils, especially in those regional and rural areas. These cuts will affect every shire council, city council and local government authority right across Australia, with the harshest cuts of all being the cuts to the Financial Assistance Grants. These cuts, combined with the government's cuts in funding for pensioner concessions, mean that local councils will be forced to either cut services or they may in fact be forced to increase rates to cover these funding cuts. Make no mistake about it—the Abbott government will be responsible for local councils being forced to raise their rates to cover these unfair cuts.

As we have heard, the Financial Assistance Grants are nothing new. They were originally introduced by a Labor government—the Whitlam government—back in 1974, because of the value of what local government contributes to our local communities. Whilst it is true that the role of local government is constantly changing and reflecting the needs and wishes of individual local communities, it is local governments that build and maintain local roads and provide important local services. That was why the Labor government introduced a way to help local governments to deliver these vital services by funding the local governments directly. Since its introduction the Financial Assistance Grants to local governments have been supported by the federal parliament in recognition of the role local government plays in the daily lives of the people of Australia. And this has held true until now.

It is this Abbott Liberal-National Party government that has taken an axe to the support we give to local governments, and they have done this through those cuts to the Financial Assistance Grants, and by ripping away the funding assistance that provides rates concessions for our senior citizens. This is an issue of huge concern for the elderly in my electorate, who are already struggling week-to-week and will now have their rates rebates reduced due to the Abbott government's cuts. And this is on top of their cuts to pensions—another surprise contained in the budget.

It is estimated that the decision to freeze Financial Assistance Grants will cost the local government sector $925 million by the 2017-18 financial year. This hurts every local community right across Australia, but it particularly hurts those smaller regional and rural councils. At its recent annual National General Assembly, the cuts to Financial Assistance Grants were considered by the Australian Local Government Association. They passed a motion that included the resolution:

Delegates of the 2014 National General Assembly, in recognition of the vital importance of the Financial Assistance Grants … to local government for the provision of equitable levels of local government services to all Australian communities, unanimously call on the Commonwealth Government to:

• Restore indexation of Financial Assistance Grants in line with CPI and population growth immediately ...

At the same annual National General Assembly of the Australian Local Government Association, it was the Tweed Shire mayor, Barry Longland, from my electorate in Richmond, who successfully moved a motion that called for the immediate reversal of the decision to cease payments for rate concessions to local government. It stated:

That Delegates of the National General Assembly call on the Federal Government to reverse its decision to cease payments under the National Partnership Agreement on Certain Concessions for Pensioner Concession Cards and Senior Card Holders that will negatively impact on council budgets.

Right across Australia, local governments are pleading their case that they will be hurt by this federal government's decision to cut Financial Assistance Grants and funding for pensioner concessions.

In my electorate of Richmond, these matters have been raised by the local councils. Byron Shire Council have raised their very real concerns about the effect of the cuts to both the Financial Assistance Grants and the pensioner concessions. They estimate that these cuts will amount to $424,200 over the next four years. Similarly, Tweed Shire Council have raised their concerns about these cuts. They estimate it will cost the Tweed community more than $1.5 million over the next four years—a massive cut.

In fact, every council contained within my electorate of Richmond may have to consider cuts to some of their services or, indeed, increasing rates. It is expected that, in Richmond, the Ballina Shire Council, the Lismore City Council, the Byron Shire Council and the Tweed Shire Council stand to lose approximately $4 million over the next four years. This is going to hurt communities in Richmond and, as I say, it is going to mean that those councils may be forced to cut services or increase rates—and this all the fault of the Abbott government and their very cruel cuts.

The people of the North Coast condemn these mean cuts to local governments, because they understand the significance of the services that local governments provide. I stand with my local community in opposing the Abbott government's—the Liberal-National Party government's—cruel cuts to local governments, and I call on them to reverse this decision immediately, because it will have devastating impacts on local councils, particularly those local councils in regional and rural areas. I especially condemn the National Party for the way in which they have completely abandoned the people of regional and rural Australia.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.