COMMITTEES

Mr ZAPPIA (Makin) (10:08): On behalf of the Standing Committee on Regional Development, Infrastructure and Transport, and also on behalf of the chair of that committee, the member for Solomon, I present the committee's interim report into local government sustainability, together with the minutes of proceedings. Report made a parliamentary paper in accordance with standing order 39(e).

Mr ZAPPIA: by leave—On 21 March 2024, the committee adopted an inquiry into local government sustainability following a referral from the Minister for Infrastructure, Transport, Regional Development and Local Government. The committee received 287 submissions and held 16 public hearings in person and via videoconference, in Canberra, Launceston, Wallan, Adelaide, Cairns, Beaudesert and Perth.

Local governments play a crucial role, acting as the closest tier of governance to the community and addressing various needs and concerns at the grassroots level. Their roles and responsibilities are diverse and multifaceted, encompassing a wide range of services and functions that are essential for the wellbeing and development of communities. The role of local governments has expanded over time beyond rates, roads and rubbish.

Today they are being increasingly relied upon to provide services which were the responsibility of the Commonwealth, state and Northern Territory governments. Many local governments now provide vital municipal services, including health care, child care and aged care, ensuring the liveability and wellbeing of their communities. They oversee environmental protection, as well as mitigating and remediating natural disaster risks.

Local governments are one of Australia's largest employers. They manage and maintain critical infrastructure and roads that connect communities, being responsible for one-third of Australia's public infrastructure. That's why our government supports local roads.

The Roads to Recovery Program supports the construction and maintenance of the nation's local road infrastructure assets, which facilitate greater accessibility and improves safety, economic and social outcomes for Australians. The Albanese government is making local roads safer with our commitment in last year's budget of $4.4 billion under the Roads to Recovery Program over the next five years.

Northern Territory councils are receiving $128 million over five years, an increase of $55 million. Roads to Recovery supports local road construction and maintenance by local government. The funding increase allows local governments to plan for the long-term maintenance and upgrade of their road networks, shielding critical road safety measures from the uncertainty of budget cycles.

It directly impacts the quality of our local roads, allows for potholes to be filled, pavements to be repaired and culverts to be installed, to improve drainage and keep roads open during bad weather, and helps make sure we all get home safely. The increased funding was part of a series of changes aimed at strengthening investment in safer, more productive local roads across Australia.

Councils and shires across regional, rural and metropolitan areas spoke to us about the constant funding pressures they face. The vast majority of local governments told the committee that their ability to remain financially sustainable was being impacted by a number of factors including cost shifting, challenges raising their own revenue and obtaining adequate funding through grants to meet local priorities.

Local governments are also experiencing skills shortages across a number of critical areas, further impacting service delivery to their communities. The committee is undertaking a thorough review of all of the submissions received and evidence gathered at public hearings and will subsequently produce a final report. In the meantime, the committee has agreed to present this interim report to provide an update on the work it has undertaken to date.

Submitters put forward wide-ranging recommendations aimed at improving the sustainability of local governments. Given the significant number of recommendations put forward to this inquiry by participants, it is challenging to list them all to you today and in the report. A brief overview of some of the key recommendations made by the various LGAs includes: review the Financial Assistance Grant program including: minimum financial assistance grants restored to one per cent of Commonwealth taxation revenue remove fixed co-contribution and short delivery timeline requirements of grants set the duration of funded programs to a minimum of three to five years to enable for delivery, stability and quality the Commonwealth government establish a new allocative, permanent funding program for local governments increase financial assistance grant funding for smaller regional, rural and remote councils based on relative need review the Intergovernmental Agreement on Federal Financial Relations ensure the allocation of grants is consistent with horizontal equalisation between councils in all jurisdictions, reflecting the different expenditure needs and revenue capacities of councils in different states the Commonwealth government consider the role local governments play, and the appropriateness of funding made available to First Nations councils in achieving the objectives of the National Agreement on Closing the Gap address skills shortages through: increase programs that will improve labour availability such as upskilling retraining, skilled migration and re-evaluate migration policy to enable access to select highly skilled experts develop mechanisms for public/private partnerships to address service gaps incentivise workers to relocate to local government regional, rural and remote areas develop education pathways to promote local government specific skills for regional areas review international best practice of workforce incentive programs and potential application in the Australian context consider local governments' role in National Cabinet and ministerial forums consider developing a new tripartite agreement between all three levels of government, that ends the cost shifting onto local governments consider making councils eligible for fringe benefits tax exemptions and concessions the Commonwealth government to amend the Fair Work Act 2009 to regulate the provision of labour hire services by national-system employers to state-system local governments the Department of Defence and other Commonwealth agencies to contribute to infrastructure required to service their operations develop a national working group to proactively prepare and mitigate natural disasters and climate-change impacts, with funding for local programs.

Once again, I stress those were recommendations put forward to the committee but are not recommendations of the committee. In tabling this report, I thank the committee members for their constructive input and dedication throughout this important inquiry process. I thank the committee secretariat as well and each of the committee members that participated, because it was an extensive inquiry.

While I am here representing the chair of the committee, I also participated in many of the hearings, so I know how far and wide the committee travelled. I also extend my sincere thanks to the many local, state and territory government organisations and unions, including the Australian Services Union and the United Services Union, who participated in this inquiry via submissions and public hearings.

With those comments, I commend the report to the House.