Timeline and background
| 2000 | Increasing concern at pressure on local government caused by cost shifting by other spheres of government. ALGA asks Commonwealth to take action. |
| 2001 | Australian Government commits to a cost shifting inquiry. |
| 2002 | House of Representatives Economics, Finance and Public Administration Committee asked to inquire into 'local government and cost shifting'. Terms of reference, however, require inquiry to be "conducted on the basis that the outcomes will be budget neutral for the Commonwealth". 406 submissions received - further 108 responses received to a discussion paper released by the committee. |
| 2003 | Committee report - Rates and Taxes: A fair share for responsible local government - tabled in Federal Parliament with bipartisan support. Committee Chair, David Hawker, addresses National General Assembly of Local Government in Canberra. |
Rates and Taxes: A fair share for responsible local government
Key findings:
"There is no doubt that local government has, over a number of years, been on the wrong end of cost shifting largely by state governments."
"Cost shifting can be seen as a symptom of the current weakness in our system and it is the responsibility of all spheres of government to address the matter."
David Hawker MP, Foreword to the Fair Share Report.
18 recommendations - key recommendations include:
- Develop an intergovernmental agreement to counter cost shifting
- Address state restrictions on local government revenue raising
- Formal recognition of local government by the House of Representatives
- COAG summit to advance the agenda
| 2004 |
Local Government Minister Ian Campbell holds roundtable meeting with local government associations and state ministers to discuss the report. Local Government Minister Jim Lloyd releases formal response to the report. The Australian Government's response has four key components:
|
| 2004 | Working group with representatives from all three spheres of government commences work on a draft intergovernmental agreement |
| 2005 | Local Government and Planning Ministers Council formally agrees to continue development of draft IGA and to convene a special meeting March 2006 to consider the document |
| 2006 | LGPMC meets in Canberra on April 12 to consider and endorse IGA |
Background
One of the key recommendations of the Fair Share report was the development of an intergovernmental agreement (IGA). ALGA, through its membership of the Local Government and Planning Ministers Council (LGPMC), has been heavily involved in the negotiations.
The senior officials group that sits under the LGPMC, the Local Government and Planning Joint Committee established an IGA working group that included representatives from the Australian Government, Victoria, South Australian, LGAQ and ALGA. This group was tasked with drafting the text of the IGA.
Throughout the negotiation process, ALGA and all state and territory local government association representatives have consistently advocated that the IGA must ensure that mandates assigned to local government:
- are agreed with local government by prior negotiation;
- are based on clear principles guiding the allocation of roles and responsibilities across and/or between spheres of government (but without spelling out the specific rights and obligations that might apply to any individual program);
- include adequate, 'locked-in' mandate funding arrangements; and
- incorporate a transparent compliance mechanism to ensure any breach of the IGA is remedied.
On 7 December 2005 the IGA working group met to finalise a draft IGA for consultation/endorsement within governments, and within the membership of ALGA. An amended final draft IGA was circulated after this meeting requesting that all jurisdictions undertake appropriate consultation within their respective governments with a view to achieving Cabinet endorsement of the IGA and subsequent signing at the planned April meeting of the LGPMC. The final Draft Intergovernmental Agreement Establishing the Principles to Guide Inter-Governmental Relations on Local Government Matters is attached.
At its 23 February 2006 meeting the ALGA Board endorsed the draft IGA and authorised the ALGA President to finalise negotiations and to sign the agreed IGA with amendments at the Local Government and Planning Ministers Council (LGPMC) meeting.
While consensus has been achieved by officials representing every jurisdiction, agreement to the ICA by all ministers and Cr Bell at the next meeting of the LGPMC is not guaranteed. As such, the ALGA President has made representations to Local Government Ministers in Victoria, New South Wales and Queensland securing their support for the IGA. Support from the remaining Minister is still being sought.
The development of the IGA has been a difficult process. A number of compromises were necessary to achieve consensus between the parties. However, it is believed that these compromises do not undermine the overall integrity of the IGA.
Summary of the IGA:
- Part I sets out fundamental principles of the agreement, its purpose and objectives.
- Part II establishes a relationship with other relevant agreements and a review requirement.
- Part III provides a set of principles to be reflected in future arrangements between the three spheres of government for the delivery of services and functions by local government. It sets out some obligations upon all parties, including the Commonwealth, states and territories as well as local government. In this respect it commits local government to 'self improvement' and sound public governance.
- Part IV establishes a framework for further agreements between local government and the other spheres of government (on specific services etc). The IGA requires that further agreements include clear outcomes, clearly defined roles and responsibilities of each level of government, clear financial mechanisms, monitoring and evaluation processes, processes to change agreements and dispute resolution mechanisms
- Part V sets out who will manage compliance of this agreement, and
- Part VI sets out some definitions of concepts included in this agreement.
