Local Government (Rate Oversight) Amendment Bill

July 24, 2019

The Hon. J.A. DARLEY (16:49): I rise to speak on the Local Government (Rate Oversight) Amendment Bill. This bill was introduced by the government as part of their election promise to cap council rates. I want to put on the record that I am supportive of capping council rates; however, I believe that certain matters need to be taken into consideration in conjunction with rate capping.

 

First of all is cost shifting. We have recently seen the state government dramatically increase the waste levy, a move that will have a significant impact on councils and their budgeting. Councils are responsible for the collection and disposal of household waste, so increasing the levies that are payable for disposing of this waste at commercial waste stations will increase councils' operating costs. I understand the government's rationale for this is to encourage councils and the community to reduce the amount of waste that is produced; however, I question whether merely increasing the levy is the most effective way to achieve this outcome.

 

When the government dramatically increases a cost that councils have no choice but to pay, it seems very unfair to also cap the amount of revenue they can collect to cover this increased cost. If councils are unable to collect more money to cover these costs, it will mean that services they currently provide will have to be cut, undoubtedly a move that will not be popular in the community. I feel that the matter of cost shifting has not been addressed in the bill.

 

I do not dispute the fact that there is growing concern about the manner in which some councils spend their money. We see some council chief executive officers on salaries higher than the Premier and I have been contacted by many constituents who are alarmed at the proportion of council revenue that is attributed to salaries for council staff. We have seen certain councils embroiled in controversy over items that have ratepayers have footed the bill for, such as golf club memberships, Apple Watches and meals at expensive restaurants. Expenditure on these sorts of items does not often pass the pub test and it is why councils often receive criticism.

 

I do acknowledge that councils are not the only ones who are criticised for such matters: there have been similar criticisms of spending within the South Australian Public Service. To me, this shows that there are improvements that can be made across the board, rather than just focusing on one government area.

 

The second matter that does not sit well with me is the manner in which the government plans to calculate the cap. These details are not in the bill; however, a proposed strategy was presented to me many months ago. I remember it being somewhat complicated and I had concerns that much of councils' time would be occupied with applications to exceed the cap, an exercise that would cost councils time as well as money. This is not the desired effect of the bill.

 

In speaking to the minister, I discussed with him an alternative way to calculate the cap that involved the principle of zero-based budgeting and adding a percentage on to this each year, plus allowing the councils to benefit from natural growth from subdivision and new development. I understand the minister is not minded to change the method of calculating the rate cap.

 

I am surprised that the minister has decided to move this bill, as I understand not much has changed from when it stalled in the house many months ago. I eagerly await to hear from the minister as to why they are now progressing the bill, given the numbers do not seem to be there to support the passage of the bill. In view of that, I support the second reading; however, I reserve my position on the other stages of the bill.

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