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Growing anger in local government

Adam Creighton and Oliver Marc Hartwich | The Courier Mail | 21 July 2011

Population growth has been one of the major political debates during the past two years.

However (and despite all the federal noise around population growth) Canberra is not the place where the debate belongs.

"All politics is local," former US speaker of the house Tip O'Neill once famously said. And all population growth is local, one might add.

As the population grows, so does the need for new houses, schools, health services, roads and waste facilities.

A growing population in Townsville has to be addressed in that city. If Maroochydore needs a new school, it's no use building one in Gympie.

Federal politicians can talk about population growth in the abstract as long as they like, but it is local communities that have to deal with it.

So how well are Australian local government leaders really equipped to deal with population growth? To find out, we surveyed the mayors and chief executives of 560 local government areas from every state, every size of council, from remote areas as well as from the inner cities.

Despite the variety of councils surveyed, there was widespread agreement in the context of our fast-growing population, it is local government that is getting the bad end of the stick. This is particularly true for Queensland.

When asked whether councils have had to increase rates to deal with population growth in the past, 86 per cent of Queensland respondents said "Yes". The overwhelming majority of Queensland councils, 93 per cent, cited infrastructure costs as the most important concern from a growing population.

Developer levies, whereby residential developers are required to pay for new infrastructure, were used by 85 per cent of respondents from Queensland councils.

These results show Queensland councils, faced with fast-growing populations, are trying desperately to make ends meet in the provision of costly infrastructure. But they are fighting an uphill battle because the available channels of local government finance are simply not sufficient to pay for the needs of growing local populations.

Little wonder then that no respondents from Queensland believed the current system of local government finance was appropriate for dealing with population growth.

It is quite clear what reform steps would be desirable. More than 71 per cent wished to receive better funding streams for their council's activities. Such streams could be a fixed share of income tax or grants linked to residential figures that automatically go up as population numbers rise.

In our survey, the anger among Australia's mayors was palpable. While they were doing their best to accommodate a growing Australia, they felt left out in the cold by state and federal politicians.

This urgently needs to change. No mayor should be punished for doing his job properly. Nor should local communities be penalised with higher rates when extra development takes place.

Local government finance reforms are never simple but if there has ever been a time to put the funding of Australia's councils on a more stable footing, it is now.

Oliver Marc Hartwich and Adam Creighton are research fellows at The Centre for Independent Studies. Read their report Australia's Angry Mayors: How Population Growth Frustrates Local Councils