500 words (5 minutes reading time) by Tim Whistler

I have read Lancing and Colin’s posts with some interest. As a long-term, self-appointed local government pundit, I don’t think the rate cap can be an existential threat to local government, but it is going to turn councils into zombies. Like zombie companies, councils will become dependent on others for their survival. They will be alive but unable to think or act for themselves. Despite what people would like to think, ultimately, they will be simply the local branch of the state government delivering the services the state decides they must. This is at odds with what many councils currently think they are doing.

“Councils have autonomy to provide services that meet the needs of their local community, and will establish a range of discretionary processes, including local laws, to guide certain activities that can occur within their municipality.”

Municipal Association of Victoria, ‘Vic Councils’ website

It is hard to see a council continuing to decide on the services they deliver for the local community when they live with their hand out to other levels of government. Councillors will effectively be the board members heading up a state-directed organisation funded by local people. Even the national government has started funding council services and assets. They have worked out that dropping a few crumbs onto the lap of a council during an election campaign is an effective vote winner. As Lancing Farrell pointed out, this just makes the situation worse when new capital assets are created, and the rate cap limits the funds available to operate them.

Anyone who doubts the impact of a rate cap should visit NSW. Take an extra spare wheel if you are driving. They have had a ‘rate peg’ for decades and councils have let assets like roads and parks degrade because they have had to focus on facilities needed to deliver services. I am sure councils will survive by funding the assets needed for their own means of production and they will let the assets that serve other purposes decline. Why would they fund roads required for freight and commuter travel to work? Why fund parks for exercise and keeping people healthy and out of hospitals? Why protect the local environment, improve water quality or reduce greenhouse emissions?

I can see the day coming when councils will only do these things to the extent that the state forces them to do it through legislation. The state government already has definite ideas about what councils should be doing.

“Each council plans and delivers services in health, planning and building control, business and economic development, waste and environmental management, and human and community services.”

The State of Victoria, ‘Know your Council’ website

The future is especially dim for councils forced to keep up with urban growth by state planning policies, or where there are large CALD (culturally and linguistically diverse) communities, or where social and economic disadvantage is impacting people’s lives. A colleague once said to me that the national government doesn’t know there are people living in Australia outside Canberra, the state governments know there are people out there in the State but not what they really need, and councils know everyone in the municipality by name. If you believe this is the case, then the FinPro reports shows how the problem plays out when you look at which levels of government get the money (and have the power).

Based on history, I can’t see councils being able to work together well enough to force a re-think of rate capping simply because it is bad public policy. Nor can I see them responding to it in ways that demonstrate to the state that councils provide incredible value for money to rate payers.

Past performance says that councils wait for a crisis to act.

No, this is not Tim but it does show how he feels on most Mondays and when reading about the BS councils have to put up with.