President’s column – 1 May 2020

ALGA President David O'Loughlin gestures at a lectern

I wrote to Prime Minister Scott Morrison last Thursday urging him to consider a local government stimulus measure in the form of a one-off grant equivalent to two quarters of the annual $2.6 billion Financial Assistance Grant funding stream.

ALGA’s approach was motivated by the undeniable fact that local communities around Australia are hurting and in need of well-directed, targeted assistance if they are to survive the Covid-19 pandemic undiminished.

Australia’s success in flattening the coronavirus curve has allowed us to look more closely at what the road to recovery entails.

From an economic perspective, the challenges look daunting – even allowing for the Commonwealth’s commendably quick implementation of initiatives designed to cushion the worst impacts of the coronavirus.

Unemployment has already risen dramatically and may exceed 10 per cent of the workforce by June.

Consumer spending was at a low base prior to the virus and has since dramatically contracted, and businesses by the hundreds of thousands have closed up shop. Crucially, many are unlikely ever to reopen.

The banks’ losses from bad debts loom large, and the flow-on effects of this in the wider economy could be significant.

Covid-19’s psychological and social impacts have been equally devastating, with increased rates of domestic violence, social isolation, loneliness and depression – notwithstanding exceptional efforts from councils across the nation to keep in touch with their most vulnerable citizens.

To address these national challenges, valuable programs like JobKeeper and JobSeeker need to be complemented with community-wide assistance and stimulus measures, particularly for those falling between the cracks.

Local Government’s proven track record of delivering services and employment boosting projects for its communities at the grass roots makes it the obvious vehicle for such a strategy.

Councils large and small across the country have already stepped up with social assistance, financial relief and stimulus measures.

But with access to only one tax and raising just 3.4 per cent of Australia’s taxes – and constrained in in our two most populous states by rate capping – Local Government’s ability to provide nation-wide economic stimulus falls well short of the Commonwealth’s potential.

In my letter to Mr Morrison, I proposed using the very efficient FAG mechanism to immediately inject $1.26 billion into local communities through their councils for a range of outcomes of mutual interest to both parties:

  • Rate relief to local businesses directed to close or severely impacted by Covid-19 restrictions;
  • Low or no-interest schemes for deferral of local rates and charges;
  • Meal vouchers for aged and other vulnerable locals to redeem at participating local cafes and restaurants struggling to stay in business;
  • Targeted capital works to improve road safety or local health and fitness;
  • Local employment-generating programs to improve local public realm and recreation precincts;
  • Retention and retraining of specialist staff from closed Council pools, libraries, gyms, recreation facilities, museums, caravan parks and tourism facilities; or
  • An area of interest to the Commonwealth it would like delivered at the local level.

I pointed out that successive federal governments have used Local Government to deliver substantial programs like Roads to Recovery and Bridges Renewal (to name just a few), with around 60,000 projects successfully delivered in partnership to date.

Moreover, the depth of our relationship with the Commonwealth has extended to partnerships to deliver a wide range of outcomes of mutual interest, from Healthy Spaces and Places to Smart Cities and Building Better Regions projects.

The Commonwealth to Local Government funding relationship is in its fifth decade, well proven and has provided undeniable benefits to communities across the nation.

The immediate distribution to councils of an additional one-off Commonwealth grant would boost local spending, sustaining local businesses and existing jobs, and help create new jobs for those doing it tough in in the besieged tourism, hospitality and retail sectors.

It would help strengthen the foundations of our communities and leverage our strong funding relationship to kick-start the recovery effort at the local level.

To strengthen our advocacy for a stimulus package, I would urge mayors and CEOs to lobby their local MPs, each of whom was sent a copy of my letter.

Your ability to speak about what exactly is happening in your local communities – and how we might build a more resilient future for households and businesses post Covid-19 – will be crucial to winning hearts and minds in Canberra.

Mayor David O’Loughlin
ALGA President