Issues
The economic constraints on high
growth Councils – funding the gap
Contemporary growth area councils seek to deliver urban amenity to a standard equitable with established urban areas. However, historically there were greater levels of support from higher levels of government via a more ‘cross-subsidised’ system of community taxation and development. The current grant system does not appropriately recognise needs of growth area councils.
Economic and governance reforms over the past two decades (via privatisation, micro-economic reform, winding back of cross-subsidies and greater emphasis on competition policy and user pays) have reallocated responsibilities between levels of government and private sector providers. The link between local development outcomes and local responsibilities is arguably sharper now than in decades past.
The critical issue facing growth area councils will increasingly be funding the gap between delivery costs and ability to raise funds. For general local government services and maintenance, councils have access to various taxation devices (which are generally non-profit generating fees for service) supported by grants. For local level infrastructure that has a high private benefit component, councils generally have access to development contribution tools as user charges.
However, for regional infrastructure and community facilities and services, which can be defined as community benefit infrastructure, local government can be in a weak position to raise funds and deliver outcomes. In many cases this refers to structural infrastructure that can shape the patterns of development across multi-council regions and hence timely provision is vital to rapidly growing regions.
Addressing the community benefit infrastructure funding challenge requires co-ordination and support from all relevant agencies, including all tiers of government.
Local Government social infrastructure responsibilities include:
• Open space – passive and active
• Bicycle / pedestrian pathways
• Libraries
• Indoor recreation facilities
• General or multipurpose community service
centres
• Children’s services
• Youth services and facilities
• Cultural/performing arts facilities
• Aged care services and facilities
• Neighbourhood houses / community learning
centres
These facilities are the most basic of social facility items that will create the glue that binds new and often isolated communities together. From a social point of view, these items should be considered to be as important as roads and drains.
Equity for New Communities
In many cases growth area communities have a young family profile, and in most cases lower than metro average socio-economic status, which generates quite specific community service needs.
Despite the higher service needs of such communities, the NGAA research demonstrated a clear under provision in community support, health and education as measured by the number of jobs in these sectors. For example the average number of residents per community support job in metro capitals is 14:1. In the high growth corridors this ratio falls to 20:1, a 25% disadvantage in terms of vulnerable communities’ access to the professional services they need.
In addition, funding allocated to NGAA areas is not commensurate with the number of people residing in these areas. In 2006, high growth communities represented 22.6% of the nation’s population. However, the NGAA research revealed that (from sample programs that were reviewed) the NGAA areas received only:
• 12.3% of Financial Assistant Grants funding (2006/07);
• 16.9% of Stronger Families and Communities Strategy funding (2006);
• 10.9% of Roads to Recovery Program funding
(2005/06-2008/09); and
• 14.9% of Strategic Regional Program funding
(2006).
It is reasonable, therefore, that some consideration be given to whether the way the aforementioned grants are allocated is as equitable with regard to population.
The notion of timeliness is also important because growth area Councils, more than most municipalities, confront the challenge of social isolation (e.g. fewer transport options and fewer services) and other socio-economic characteristics that reinforce disadvantage (e.g. high youth unemployment).
There seems little doubt that all viable social infrastructure models being considered need a degree of public investment and that the facilities being sought have important social well-being implications (e.g. they encourage a healthy population and minimise the adverse consequences of residential isolation such as post-natal depression and other mental health issues). Unlike improved health from active participation in leisure centres these social outcomes cannot be achieved via the application of a simplistic user pays model.