LOCAL GOVERNMENT AMENDMENT (PERFORMANCE REPORTING AND ACCOUNTABILITY) BILL 2013

I welcome the opportunity to be called and to make a contribution on behalf of the opposition to the debate on the Local Government Amendment (Performance Reporting and Accountability) Bill 2013. I indicate from the outset that the opposition does not oppose the bill. I look forward to the usual erudite contribution from the Parliamentary Secretary for Local Government, the member for Mornington. No doubt he will not only make various reflections on my contribution but also bring to the debate his own experience, lengthy as it is, in the local government sector. Importantly, I thank the officers, including the minister’s chief of staff, who gave me the courtesy of providing me with a very good briefing about the genesis of the bill and the substantial body of work that has been done in developing the frameworks and criteria for performance reporting and accountability by local government. It has been a very substantial body of work. Some of that is reflected in the second-reading speech.

I am interested that the work has been progressed over a period of time by successive governments. As history will recall, there was the reform in, I think, 2003 that was undertaken by I think then Minister Cameron, who I think was the Minister for Local Government at that time.

Minister Broad, I am sorry, was the Minister for Local Government at the time who did a substantial body of work to improve accountability through more transparent performance reporting arrangements. The Auditor-General at that time provided some commentary about this. He found that whilst those performance indicators were a good start towards having a more transparent process of local government reporting for ratepayers, there was still a disconnect between what was being reported and what was of relevance to ratepayers. That was an important consideration.

The Auditor-General at the time identified challenges within the sector, including ineffective articulation of planning matters, budgeting and the need to strengthen oversight. Actions to address these shortcomings had been restricted by a lack of sharper and more relevant performance reporting information.

It is fair to say that local government may not necessarily have embraced performance indicators as fully as it should have and seen them as an opportunity and not as an impediment. Certainly in my time as the Minister for Local Government I always encouraged — I know this Minister for Local Government also does, and you see this reflected within the framework and the performance indicators — local government to seize the challenge and seize the opportunities that arise through having an open, transparent and fully articulated set of frameworks that, firstly, people can understand, and secondly, are accessible to people.

The internet is now an extremely well-developed tool, and people who are not connected to the internet can go to their local library for access. I do not think there would be a library in the state that does not have public internet access for residents.

Many elderly residents use the library as a source of social discourse and as an opportunity to engage in public life, but the internet has become a powerful element in facilitating that.

Free wi-fi, as the member for Rodney quite appropriately indicates. I remember being with the member for Rodney in his electorate when as the then Minister for Local Government I provided substantial funds for the upgrade of the library in Echuca.

Yes, half a million dollars. I thank the member for Rodney for reminding me. Wi-fi was an element of that upgrade.

The reason I raise this is that for some people having access to information is an important thing. Public libraries are a fantastic institution and a fantastic resource, particularly for students who often use them as study venues, for elderly residents who may go to a library to access newspapers and periodicals and for people for whom English is a second language, as many libraries will have a wonderful array of resources in their mother tongue. As the member for Rodney indicated, there is also free internet access, often through wi-fi, where residents have the opportunity to access the information that the government now requires to be put on the internet for people to scrutinise.

This is important not only because of questions of transparency but also in terms of where it is that local governments are investing the hard-earnt resources of ratepayers being established and understood. One of the elements of these performance benchmarks is that local governments will now have to articulate their capital works programs and their major projects.

This is a really important thing. As we know, local governments are always criticised when there are rate increases. No local government wants to be above the pack on rate increases. It is always a very vexed issue when councils are setting their rates for the year. Under the Local Government Act 1989 councils have a responsibility to put out their draft budget for public consultation for a period of time before finally deliberating on the budget and setting the rates for the year.

I have always advocated that there be constraints on local government rate increases and that where rate increases occur, councils should be able to articulate why there are rate increases and where those funds are going. That is why it is important when a council is undertaking a major capital program that you can track the clear relationship between the rate increase, why it is in place and the enduring benefit to the community of the capital program. It is my deep belief that when a council is able to articulate that in a coherent way, people understand it and accept it. It is an important aspect of what the orthodoxy should be of how local government deals with these issues going forward. Local government should not deal with these issues in a defensive way but by saying, ‘This is how we articulate for you as ratepayers how we are going to spend the rate dollar’.

In that context it is important that we understand the other side of that argument. We have councils that are under enormous pressure, particularly population pressure, in growth areas such as Wyndham and Casey. I often get this figure wrong, but in Wyndham something in the order of 70 children are being born each week. That is an extraordinary number when you think about it in terms of the physical and social infrastructure that local government has to support. I think the figure is 70 children a week; it is an unbelievable number.

It gives you some grasp of what local government has to tackle going forward in providing even the most basic infrastructure, such as maternal and child health centres, kindergartens and so forth. It leads to massive challenges for state and federal governments in the provision of other fundamental services, such as schools and hospitals.

It is always the sharp end of the stick for local government, which takes much of the brunt of this challenge. An argument can be put about the way financial assistance grants work between the commonwealth and the states, the tax share and all of those issues. Perhaps at some point state and federal governments may seize the opportunity to address how we are going to go forward in terms of appropriate tax share between commonwealth and local government within a broader framework of service provision. There is no doubt that in the growth areas councils are struggling to simply keep up.

The flipside of that is our smaller local governments. The report on the local government financial audits that was tabled yesterday I am pleased to say yet again provided a clean bill of health for local government, but there were some warnings.

Yet we still have circumstances where some of our smaller regional governments continue to have systemic problems in terms of their budgetary situations, frankly, through no fault of their own. They find themselves in a situation where they have a declining population, where they have a declining rate base or where they have an elderly population which is inherently in need of the services of local government, whether that be home and community care services, Meals on Wheels, home help or those sorts of services or indeed nursing care and so forth, where so often the burden falls upon local government. I fear their situation is becoming increasingly more acute as we go forward.

I know that certainly in my time we tried to assist by ensuring that there was a slanting of financial assistance grants more systemically towards those smaller local governments, but at some point we have to stop and look at this in a much more systematic way that will address the long-term problems of some of the smaller local governments.

Our only concern about the reporting framework is that we do not want to increase the burden on local government in terms of this new reporting regime. I talked that issue through a little bit with the officers, and I indicate that I thanked the Minister for Local Government for the excellent briefing that was provided to me by her chief of staff and senior officers. I simply make that point in passing because I do not think any of us want to continue to load up local government with extra reporting responsibilities. I note from the minister’s second-reading speech that she was also talking about another wave of trying to relieve some of the regulatory burden on local government.

If you can find a better balance, that is a very good outcome and one that ought to be supported more generally.

The reference group that was put together for this was a very competent group of people. Obviously we had the key players there, including the Municipal Association of Victoria, the Victorian Local Governance Association and, in my view, some of the best thinkers in local government, not only people from the Office of Local Government but also some of the brightest CEOs going about, who formed the basis of the reference group. That has shaped a set of performance indicators that is well established and, as I understand it, is being piloted at the moment through local government. That is a good thing. I asked the staff how these indicators will be enshrined within this framework, and of course it will come by way of regulation that attaches to the act amended by this bill. The reference will happen under the normal regulatory framework, which of course will include going through the regulatory impact statement process.

That is a good thing because we now find ourselves in circumstances where this is being piloted. It is out there in real life. It has been dealt with by councils, and I assume — the parliamentary secretary may wish to take this up — that if there is any tweaking that may need to be done in terms of the development of these regulations, it will be informed by the piloting that is currently being undertaken.

With those relatively brief comments, I conclude by saying that the best thing we can do as a Parliament is not only to support local governments but to work with them. I have to acknowledge that the minister has worked with local governments in the development of these performance indicators in a way that has brought people along. We should not see this as being some form of further burden upon local governments. It should be seen by local governments as an opportunity to show their communities just what fantastic work they do across a plethora of areas of service delivery which impact so directly on the lives of people. We talk about local government being the level of government nearest to the people, and the term is often flippantly used by people, but this is the truth. The truth is that there is no more intimate contact between residents and a level of government than local government, and it is the intimacy of that relationship that is a precious thing.

If we can do anything as a Parliament to ensure that that relationship is strengthened and that there is a process in place that is accessible to people and where the transparency of performance is clear, then that is a good thing.

It is on that basis that the opposition certainly does not oppose this measure. We think it is an important initiative. It builds on the back of earlier work we did, and that is a good thing. It was informed by two Auditor-General’s reports, and we thank the Auditor-General for the commentary that was provided in my time and indeed in the minister’s time. I think the last commentary from the Auditor-General in relation to these matters was made in 2012. That has been picked up, and this is the parliamentary process working at its best. With those few words, I wish the bill a speedy passage.