Australian Local Government Association

21 November 2006

Contents

• President's report
• Chief Executive's report
• Board members
• Statement of financial position

President's report

Taking stock of progress made on ALGA's three principal goals - Fair Funding, Fair Treatment and Formal Recognition - shows that we accomplished a significant amount on these fronts in 2005-06.

In relation to the 3 F's, we have had a year of milestones with strengthened partnerships and the historic parliamentary resolution on recognition of local government passed by the House of Representatives and the Senate recently.

The signing of the intergovernmental agreement (IGA) on cost-shifting was a landmark development which will assist local government finances in the future. Previously, cost-shifting cost local government between $500m and $1.1b a year. In consultation with state associations, we also commissioned the PricewaterhouseCoopers report into local government financing.

Over the past year, we have forged deeper partnerships with the Federal Government in health, the environment, emergency and disaster management and aged care.

The flagship example is the Roads to Recovery program - the largest single partnership with the federal government under which $1.65b will be provided to local government in the four years from 2005-09 to plan, design and construct many thousands of projects across the nation to benefit local communities and economies.

Appropriately enough, the financial year began with the opening of the National Local Roads and Transport Congress in Launceston on July 4. More than 430 local government leaders attended and applauded the introduction and renewal of the Roads to Recovery Program and particularly acknowledged the work and commitment of the retiring Minister for Transport and Regional Services, Deputy Prime Minister John Anderson MP. The Roads and Transport Congress resolved to develop a national local government transport strategy with the aim of securing long-term certainty for local road funding and strengthening partnerships across all spheres of government to address areas of specific need.

On July 7, a new Minister for Transport and Regional Services was appointed, Warren Truss, and a new Deputy Prime Minister, Mark Vaile. The appointments were welcomed by local government, with both men having strong local government backgrounds.

Tragedy struck the next day with the London bombings. I wrote to the Mayor of London, Ken Livingstone, to offer support and sympathy to the people of London in the wake of these abominable terrorist attacks.

In August, local government received a large boost with agreement by federal and state local government ministers and ALGA to develop the aforementioned IGA to put an end to cost shifting. Local government, planning ministers and ALGA also received a report from the Development Assessment Forum which sets out a model process for development assessment. ALGA strongly opposed any suggestion that the role of elected members be weakened in the decision-making process.

The Council of Australian Governments (COAG) meeting in September focused on the development of a national code of practice which made provision for local government to be more closely involved in counter-terrorism exercises and kept informed in the event of a national emergency.

Local government flexed its muscle in October with a 'call to arms' for local councils to rally in Canberra at the National General Assembly (NGA) of Local Government in November.

Local government turned out in force at the NGA from November 7-10. Around 600 leaders took the opportunity to rally to send a clear message on the importance of the IGA on costshifting, and to increase momentum for councils to have access to growth funding and a new deal for local government. 60 motions were debated under four broad themes: local government financing, population and ageing, the environment and infrastructure.

At the NGA, we were delighted to hear the Minister for Local Government, Territories and Roads, Jim Lloyd announce an additional $100m funding boost for the regional roads component of the AusLink/Roads to Recovery program.

The State of the Regions Report was launched at the Regional Cooperation and Development Forum. Highlights of the 2005-06 report included:

• Estimated economic benefit of extending ADSL broadband coverage to regional areas
• Market conduct, regulation and broadband access in regional Australian Local Government Association
• "Baby bounce" - fertility in Australia over the past decade
• Net migration, population and ageing trends by region, 1996-2008
• The role of local government in regional development.

January saw the Howard Ministry refreshed, with promotions for Ministers Julie Bishop, Senator Santo Santoro and a new Parliamentary Secretary assisting the Prime Minister on water issues, Malcolm Turnbull. Minister Brough was also appointed to the new portfolio of Family, Community Services and Indigenous Affairs. Andrew Robb was appointed as Parliamentary Secretary on citizenship matters.

Also in January was the release of the Productivity Commission report on the nation's health workforce which included proposals to help counter shortages of health professionals, particularly in outer metropolitan, regional and remote communities.

In February, I attended the COAG meeting at Parliament House in Canberra which focused on the national reform agenda, and reached agreement in areas of health, particularly mental health, and portability of skill qualifications. The agreement reached specifically acknowledged the involvement of local government in many of these issues and the role that is playing to progress the national reform agenda and the benefits it will bring to all Australian communities.

In March, I announced the appointment of our new Chief Executive, Adrian Beresford-Wylie. Adrian brings with him a wealth of experience as a senior Commonwealth public servant with an exceptional knowledge of federal-local government relations.

April proved to be another highlight of the year with the signing of the IGA. I congratulated the Federal Minister for Local Government, Jim Lloyd, for providing leadership on this issue and state and territory ministers for working together to get an agreement in place.

Later in the month, ALGA released the results of the 2006 survey on ageing and local government. The survey revealed that 99% of councils believe that population ageing will have an impact on their municipalities - just over 30% identified the impact as severe. It highlighted the priority that many councils are now giving to the impacts of population ageing. The results assisted ALGA to develop its Ageing Toolbox and to build the capacity of local government to plan for an ageing population.

The Federal Budget in May contained good news for Australia's 673 councils, in the form of an additional $300m for local roads, bringing the total allocation for the Roads to Recovery program to $1.65b over its four year funding period (2005-06 to 2008-09).

Also in May, councils were asked by ALGA to complete a landmark emergency management survey. The first of its kind, the survey will provide a clearer national picture of local government's emergency management responsibilities and capabilities.

In June, ALGA commissioned financial consultants PricewaterhouseCoopers to undertake a major study of local government financing, with a report due later in the year. ALGA has argued long and hard that - at the federal level - we need to move away from the system of financial assistance grants to a fair share of federal taxation revenue.

What lies ahead?

2007 will be the year in which we Push the Agenda forward - and continue to build on the momentum we have created with our '3Fs' campaign. We still have a way to go in terms of Fair Funding in particular.

The challenges in regional areas are particularly stark. 87% and 54% of rural remote and rural agricultural councils respectively have rates covering less than 40% of costs, making them dependent on grants.

The partnership model which has served local government and the Australian people well shows the path we must take.

In what will be a federal election year, we need to make sure that both the Government and the Opposition include local government priorities in their campaign platforms. The National General Assembly was an opportunity to send a clear message - that local government is facing severe financial pressure and we need to work together to alleviate the situation facing local communities and regional economies across the nation.

Chief Executive's report

I began as ALGA's Chief Executive on 1 May 2006 and my first six months have been spent on getting across the enormous range of policy issues local government is involved in at the national level, building relationships with the ALGA Board and State and Territory Association CEOs and strengthening ALGA's organisational capacities.

Local government is clearly a force to be reckoned with in twenty first century Australia. Since my early days in the public service, in the Department of Transport and Regional Services and even more recently, during my time in the former Deputy Prime Minister, John Anderson's Office, there is a marked difference as to how local government is seen within and outside the Government.

Local government is quite clearly widely recognized as the third sphere of government. ALGA is a member of 14 ministerial councils as well as the Council of Australian Governments (COAG). The scope of work is breathtaking and there has never been a better time to pursue our agenda and exert our growing influence. Partnerships with the federal government are growing and strengthening and, as well as roads and transport, include natural resource management, aged care, health, housing and transport.

Supporting the role of Chief Executive is a team of talented people at ALGA headquarters in Deakin. I would like to acknowledge the continuing support of the Executive Director, Policy and Research, John Pritchard and the small but hard-working band of policy advisers, particularly Rolf Fenner. I would be remiss not to also mention the contribution made by Katie Whitehead, who has pulled together four General Assemblies, and also worked to make the Roads Congress a success. Finally let me acknowledge the work of all the other members of the team, including the President's and my Executive Assistant Karen Anderson and Administrative Assistant Gabriella Sergi.

There have been changes in the team since I began and I am pleased to say we now almost have a full complement of staff, with our economist Katrina Wootton most recently coming on board. Our Director, Public Affairs, Rohan Greenland left in July after four years in the job to take up an opportunity with the Heart Foundation of Australia. He has been succeeded by Amanda Lynch, previously a senior adviser to the Assistant Treasurer. Andy Hrast came from the land transport area of the Department of Transport and Regional Services to take up the Director, Transport Policy role, and Matt Lawrence has joined us as the Assistant Director, Health and Ageing Policy. Rosemary James is completing the project begun by Sharon Csanki in Emergency Management. Mark Dale as our Web Manager plays an important role in ensuring our website is user-friendly and accessible to our stakeholders.

Our flagship weekly newsletter 'ALGA News' is continuing to inform local government, media and our stakeholders about the policy issues we are driving and to increase awareness about local government challenges, concerns, triumphs and successes. We now have 2076 subscribers to the newsletter which is funded by advertising, and the success of the newsletter is apparent by the steady increase in advertisers and the strength of the subscriber base.

The profile of local government as an active, positive contributor to national debate was boosted with a successful Roads Congress and General Assembly in 2005-06. The Statement of Accounts show that we continue to operate in good financial shape.

The challenges ahead in the next 6-12 months are to update our ALGA Strategic Plan, run a successful Roads Congress in Newcastle in July and the NGA in Darwin in November, and to continue to lobby the Government and the Opposition on our policy agenda in the lead-up to the 2007 Budget and the election expected in the latter half of the year. The strategic alliances we have formed and are continuing to form and our relationships with the Government and other parties are excellent and we will work hard to ensure they continue to reap dividends for local government and for local communities around the nation.

Company directors

The names and particulars of the directors of the Company in office at any time during or since the end of the financial year are:

President: Cr Paul BELL AM
President - Local Government Association of Queensland
(Director since 5 September 2000)

Vice President: Cr Bill MITCHELL
President - Western Australia Local Government Association
(Director since 6 November 2002)

Vice President: Cr Geoff LAKE
President - Municipal Association of Victoria
(Director since 10 September 2004)

Directors

Cr Bob ABBOT
Vice President - Local Government Association of Queensland
(Director since 17 March 2006)

Mayor Joy Baluch
Past President Local Government Association of South Australia
(Director since 17 March 2006)

Cr Ann Bennison
Vice President Local Government Association of Queensland
(Director since 17 May 2004)

Mr Simon Corbell
Member ACT Legislative Assembly
(Director since 28 November 2001)

Cr Jenny Dale
Councillor - Municipal Association of Victoria
(Director since 3 December 2004)

Mr John Hargreaves
Member ACT Legislative Assembly
(Director since 4 November 2004)

Cr Robert Legge
Vice President Local Government Association of Tasmania
(Director since 31 May 2002)

Cr Lyn Mason
President Local Government Association of Tasmania
(Director since 12 June 2000)

Cr Genia McCaffery
President Local Government Association of New South Wales
(Director since 2 June 2006)

Alderman Kerry Moir
Mayor Local Government Association of the Northern Territory
(Director since 31 May 2005)

Cr Pauline O'Connor
Deputy President Western Australian Local Government Association
(Director since 23 August 2005)

Cr John Rich
President Local Government Association of South Australia
(Director since 12 October 2005)

Cr Max Amber
Past President Local Government Association of South Australia
(Director since 22 October 2002: resigned 12 October 2005)

Cr Paul Kelly
Deputy President Western Australia Local Government Association
(Director since 9 November 2004: resigned 26 August 2005)

Cr John Legoe
President Local Government Association of South Australia
(Director since 26 November 2003; resigned 8 December 2005)

Cr Phyllis Miller
Past President Shires Association of New South Wales
(Director since 10 November 2004: resigned 14 July 2006)

Cr Dr Sara Murray
Past President Local Government Association of New South Wales
(Director since 7 May 2004: resigned 24 May 2006)

Cr Colin Sullivan
President The Shires Association of NSW
(Director since 14 July 2006)

Cr Ray Woolridge
Vice President Local Government Association of the Northern Territory
(Director since 14 October 2004)

Alternate Directors

Mr Gordon Davidson
ACT Government: resigned 11 November 2005
(Alternate Director for Mr Simon Corbell)

Mr Hamish McNulty
ACT Government
(Alternate Director for Mr John Hargreaves)

Mr Mike Zissler
ACT Government
(Alternate Director for Mr John Hargreaves and Mr Simon Corbell)

Statement of financial position

Balance sheet as at 30 June 2006