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Part one: Pressures–the reform of Australian local government

Challenging intergovernmental relationships

Relationships between local governments

Australia’s 700 or so local governments are highly diverse. The most populous has over 5000 times more people than the most sparse. The richest spends over 50 000 times more each year than the poorest and the most extensive covers 250 000 times the geographic area of the most compact. The most populous, rich and compact local governments are located within capital cities and regional centres. Population growth and development pressures are ongoing concerns for most of this group of city and town councils. Australia’s sparse, poor, extensive local governments govern its rural areas, vast rangelands and deserts (Crown Content 2005). Australia’s tyranny of distance is a constant pressure for this group, with the most poorly resourced local governments governing some of Australia’s largest, most remote and inaccessible areas.

Australia’s local government diversity leads to varied political priorities. The political party affiliations that dominate relationships in other spheres are of minor concern for local governments—featuring only in capital cities and other populous centres. Local governments rely instead on local government associations, at district, regional and state level, as well as the Australian Local Government Association (ALGA), to represent their collective views. The most significant political events for local governments are the annual state and national local government association assemblies. These bring together representatives from nearly all councils to express their views on major policy problems. In contrast to the party political parliaments, voting blocs at local government association assemblies vary radically between issues. Shires and cities are opposed on some issues, proactive and parochial councils disagree on many, and environment-oriented and development-oriented councils vote differently about others. The overall result is a dynamic tension that defies simplistic policy solutions and makes the local government associations essential allies for harnessing effective engagement on any initiative where local government implementation is needed. Links to local government associations are provided in Table 1.

Policy statements resulting from local government association assemblies are available online for each association. The peak statement is the National Agenda for Australian Local Government, which is the summary record of resolutions passed by successive National General Assemblies of Local Government (available on the ALGA website ). The most dominant themes in recent years have been for effective representation wherever local government roles are being substantially expanded, and adequate ongoing funding to support the new roles. Local government’s continual need to make these sensible demands shows that the other spheres have not yet addressed these core problems. It is also worth noting that local government assemblies rarely vote against reforms, but usually seek ways to make them work in the context of other responsibilities (see for example ALGA 2003).

Table 1: Links to local government associations

Australian Local Government Association	ALGA	http://www.alga.asn.au
Local Government Association of NSW and the Shires Association of NSW	LGSA	http://www.lgsa.org.au
Local Government Association of Queensland	LGAQ	http://www.lgaq.asn.au
Local Government Association of the Northern Territory	LGANT	http://www.lgant.nt.gov.au
Western Australia Local Government Association	WALGA	http://www.walga.asn.au
Local Government Association of South Australia	LGASA	http://www.lga.sa.gov.au
Municipal Association of Victoria	MAV	http://www.mav.asn.au
Local Government Association of Tasmania	LGAT	http://www.lgat.tas.gov.au

Relationships with state and territory governments

Local governments are constituted under state and territory legislation. State and territory governments can therefore sack councils and disband local governments, and many have done so in recent years. Because of this power, state governments consider local governments to be creatures and servants of the state, and expect them to implement state and territory legislation accordingly. But local government councillors are democratically elected and have formal legislative roles within their local areas. Councils and the staff they hire consider themselves to be creatures and servants of the local area—that is, they are autonomous. Instead of being driven by any specific statute, local governments use state and territory laws as toolkits to fix local problems, rather than using them as the instruction manuals that the state or territory government intends them to be. The simultaneous but contradictory views of local governments as creatures and servants of the state and the local are both valid in historical, legal and practical terms. The results of this conflict cause considerable frustration among officials working in both local and state or territory spheres, since their expectations of one another are rarely met (Wild River 2002a).

Figure 1 shows these contradictory views diagrammatically and also introduces a third perspective on local government. This is a view that is held by facilitators, who are individuals with experience and understanding of both state and local governments. Facilitators work in a range of roles throughout Australia, especially within local government associations, regional offices of state government agencies, regional organisations and in the role of local government chief executive officers. Although they can see both sides of issues involving local governments, facilitators are no less frustrated than others (see ‘Part two – natural resource management’) (Wild River 2005).

Relationships with the Australian Government

Formal relationships between the Commonwealth (Australian Government) and local governments are not established by the Australian Constitution, nor were these relationships close throughout most of Australia’s federal history. These relationships have strengthened in recent decades.

The first major push for closer relationships between the largest and smallest levels of government was toward the end of the Whitlam government era, when a 1974 referendum failed to include local government in the Australian Constitution. The more successful connections have resulted from financial exchanges. Since 1974–75, the Australian Government’s Financial Assistance Grants have been distributed by state governments according to formulae for horizontal equity (between local governments within each state). In 2004, these grants accounted for 32 per cent of total local government funds, with the poorest local governments being most dependent on them for funding day-to-day work (McNeill 1997; DoTaRS 2005). Roads to Recovery, and the National Heritage Trust are current programmes that involve tied grants from the Australian Government to local governments. Both have proven successful in encouraging local governments to address national agendas.

Relationships with regions

Regional arrangements are often considered optimal when large-scale problems demand local action. But some practical problems inhibit relationships between regional agencies and local governments. The problems include the transience of regional agencies and their frequently unclear roles in relation to local government (see Dore and Woodhill 1999; Bellamy et al. 2003).

Figures 2 and 3 map out some important challenges that face local governments in working with regional organisations. The focus here is on regional dissonance or regional boundaries with such variety and incongruence that they create barriers to effective, long-term local–regional partnerships. Regional dissonance problems are of relatively minor concern for capital city or regional centre local governments, since they are generally at the hub of regions. But they can be significant for the many local governments in between, especially those on Australia’s many regional borders. Two types of regional dissonance are shown—region-mixing and region-straddling.

Figure 2 demonstrates region-mixing through the example of Noosa Shire. Noosa’s membership of four environmentally-relevant regions is mapped to demonstrate how it is expected to mix with different sets of neighbours for each of four initiatives. Although only four are shown, Noosa is part of more than 18 different regional arrangements such as these (Wild River 2002a, chapter 2).

Figure 3 shows region-straddling, where local governments cross regional boundaries. The map shows how individual Victorian local governments straddle up to four Natural Heritage Trust (NHT) regions. The priorities and policies of each region differ even though they are constituted for the same purposes. Local governments that straddle regions need to invest resources to connect with each regional agency that they straddle (see ‘Part two’).

Amalgamations

Australian local governments remain under pressure from an ongoing reform agenda involving amalgamations, enhanced roles, accountability and devolution. The overall reforms aim ‘to equip local governments with the powers and skills necessary to function productively in a rapidly changing environment’ (Marshall 1997, p. 2). The amalgamations are discussed here first.

Figure 4 shows how the number of local governments has been reducing gradually in most states since the early 1900s (Power at al. 1981). The current reform era has included such extremes as the drop from 210 to 78 local governments in Victoria during three years in the early 1990s. Local government amalgamations have also featured in Queensland, Tasmania and South Australia (Vince 1997), and are ongoing in New South Wales. Meanwhile, against this trend, 93 Indigenous local governments have been established in the Northern Territory, Queensland and South Australia. Indigenous local government is most dominant in the Northern Territory, where 650 of the 815 elected members are Indigenous (Local Government Association websites, see Table 1).

The environmental implications of amalgamations are neither clear nor simple. The potential functional improvements are offset through disruptions in the short term. For instance, before the Victorian amalgamations, many councils had engaged in community consultation to establish local conservation plans. The amalgamations required that new plans be replaced, thus undermining community members’ willingness to work together towards conservation objectives for the new amalgamated local governments (Wild River and Nelson 2002). Many environmental successes have resulted from amalgamations, including sustainable buildings that have been designed and built for some amalgamated councils. The Solar Pergola, which dominates the front entrance at the sustainably remodelled Moreland City Council Offices in Melbourne, is shown as an example in Figure 5 (Wild River et al. 2002c). Victorian local governments are now among the most populous and rich in Australia, and are more able to hire environmental specialists than local governments in other states.

Enhanced general roles and accountability

Local government Acts are among the longest and most complicated of all state government legislation, and have rarely changed more than once in a generation. But since 1989, all states and the Northern Territory have replaced or substantially updated their Local Government Acts as part of the current reform agenda. The changes have increased local governments’ general competence powers, affected day-to-day operations, and made councils more accountable while removing prescriptive requirements (Wensing 1997).

The changes to local government structure and function are consistent with broader reforms that include deregulation of financial and other markets, competition policy, industrial relations reforms, and corporatisation or privatisation of public utilities. Some local government initiatives have tried to harness environmental benefits from the reforms, but without such concerted efforts, beneficial environmental outcomes are not guaranteed (see Osmond and Ray 1996).

Devolution, unfunded mandates and cost shifting

Devolution of responsibilities to local government has occurred in Australia at unprecedented rates over recent years. Devolution of political power and choices as far as is administratively possible can benefit performance by connecting policy making with implementation and impact (Jones and Stewart 1985). Conversely, the risks associated with devolution include inconsistent implementation capacity between local governments, with resulting variations in service delivery (Scott 1988).

In Australia, the problem of inconsistent capacity has been exacerbated by the degree of unfunded mandates and cost shifting between spheres. In 2003, these issues were the subject of a major inquiry by the House of Representatives Standing Committee on Economics, Finance and Public Administration (SCEFPA) Inquiry. The SCEFPA report identified five factors that are increasing local government functions (SCEFPA 2003, 2.24):

• devolution—another sphere of government gives local government responsibility for new functions
• raising the bar—another sphere of government increases the complexity or standard of local government services
• cost shifting by either of two means—local government agrees to take on the services of another sphere and funding is later reduced or stopped, but communities demand that the service continue; or another sphere ceases a function and local government steps in
• increased community expectations—community demands for improved services are met by local government
• policy choice—individual local governments choose to expand their service provision.

ALGA estimates the current dollar cost of all cost shifting to local government to be $0.5–$1.1 billion annually (SCEFPA 2003). The SCEFPA report does not identify environmental cost shifting, but local government environmental responsibilities and associated costs have increased due to each of the factors listed.

Sea change population pressures

Many coastal areas in Australia are undergoing rapid development due to the increasing ‘sea change’ phenomenon. Sea change developments pose threats to sensitive coastal environments in addition to their significant social implications. Population changes in forested and rural areas also pose their own distinctive challenges (see Smith and Doherty 2006).

Five ‘ideal types’ of sea change communities are summarised below, with examples of the local governments fitting each type (after Gurran et al. 2005):

• coastal commuters—suburbanised satellite communities in peri-metropolitan locations (for example, Gosford, Wyong, Pine Rivers, Caboolture, Wanneroo, Casey, Mandurah, Rockingham and Onkaparinga)
• coastal getaways—small to medium coastal towns within a three-hour drive of a capital city (for example, Bunbury, Busselton, Bass, Surf Coast, and Victor Harbour)
• coastal cities—substantial urban conurbations beyond the state capitals (for example, Cairns, the Gold Coast, Maroochy, and Greater Geelong)
• coastal lifestyle destinations—predominantly tourism and leisure communities (for example, Coffs Harbour, Byron, Hastings, Whitsunday, and Moyne)
• coastal hamlets—small, remote coastal communities often surrounded by protected natural areas (for example, Robe, Grant, Augusta-Margaret River, and Douglas).

Sea changers expect physical infrastructure and social services in coastal areas to be as equivalent to those that are available in metropolitan centres. Their demands include roads, sewerage, water supply, public transport, health, education and training opportunities. All of the sea change local governments report infrastructure shortfalls and lack the capacity to finance these shortfalls through existing funding sources (Gurran et al. 2005, p. 8).

There are current calls for broader spheres to support sea change local governments, so they can address the distinctive and complex challenges they face in dealing with new population pressures. Long-term infrastructure planning and funding strategies are needed if environmental and heritage values are to be accurately identified and effectively protected in the wake of these pressures. Meanwhile most of Australia’s rural areas are facing challenges in retaining infrastructure and services, while farming populations steadily decline. Many of the affected local governments have implemented innovative ways to address these challenges and there are valid calls to audit, build on and share the work between local governments (Gurran et al. 2005, p. 9).

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