President’s Column – 3 April 2020

ALGA President David O'Loughlin gestures at a lectern

Local Governments across the nation are stepping up to the Covid-19 task, but the calls for rate relief, rates freezes, facility closures and plummeting parking and user charges revenue, combined with apparent lack of assistance from JobKeeper, Child Care packages or any other source is tough going for most councils.

A string of extraordinary Covid-19 support packages and economic stimulus measures has followed last month’s enactment of a national cabinet comprising the Prime Minister and first ministers.

The support package of perhaps the greatest moment to the local government sector this week was Prime Minister Scott Morrison’s announcement on Monday of a $130 billion wage subsidy program called the JobKeeper payment.

Eligible employers will receive a flat payment of $1500 (before tax) per fortnight for each eligible employee, with the six-month subsidy to start on 30 March.

To be eligible, the employer’s turnover had to have been reduced by more than 30 per cent relative to a comparable period (of at least one month) a year ago, with not-for-profit entities also eligible.

Many within the local government sector have been informed that councils will not be able to access the JobKeeper scheme under the already announced eligibility criteria due to:

  1. Local Government entities not being specifically listed as eligible organisations; and
  2. Local governments business structures are consolidated and not structured in such a way that they are easily able to demonstrate a 30 per cent reduction in their total revenue despite the revenue for facilities that have been forced to close being reduced to nil in many instances. 

ALGA strongly supports the JobKeeper initiative as an essential step to enable private businesses significantly affected by the Covid-19 to retain staff and quickly re-open once we emerge from the current crisis, thereby helping the Australian economy recover.

However it appears Local Government “businesses” are being treated very differently.

Councils across Australia are committed to playing their part in our national response to the Covid-19 pandemic. They are doing everything possible to protect people’s health, provide support and deliver the services needed to keep our communities running during these difficult times.   Online story time, Baby Bounce by Facebook, vulnerable calling services, home library deliveries, meal and shopping services, online business training and mentoring, and many, many other new initiatives are running full steam alongside teams working to maintain core services such as planning and building assessments, inspections and infrastructure maintenance, upgrades and replacements.

Service levels elsewhere have been made much more difficult in the face of closed community facilities such as youth programs, swimming and sporting recreational facilities, libraries, meeting rooms, halls, theatres, museums, visitor centres, caravan parks, regional airports and tourism facilities – and council revenues are falling.

In addition, many councils across the nation are also under great financial pressure to provide rate relief and payment concessions from within existing budgets and to freeze or lower rates in upcoming budgets – constraining their capacity to fully participate in the economic recovery we all know we will so vitally need.

These immediate and impending impacts on revenue cannot be withstood whilst thousands of specialised employees from closed facilities remain on the payroll with no work and no financial assistance to retain them.

The vast majority of councils do not have the financial reserves to provide for any further retention of casual or permanent staff associated with closed facilities where user charges have plummeted or expired.

Many councils, in thin markets, provide additional services such as aged care and social support for vulnerable Australians because the private sector is unable to meet community needs. Such Council activities are very much comparable to private businesses, are suffering exactly the same losses, and should be treated exactly the same in terms of assistance.

Councils also use revenue generated from their profitable services to support other non-commercial services needed by the community – another gap that has not been addressed.

I have written to Mr Morrison urging him to address these issues in the drafting of the legislation for the JobKeeper program.

If councils are not included under the scheme, the entitlements available to local government employees who work in facilities that have been forced to close will be less than those who work in comparable workplaces in the private and not for profit sector – and our estimates indicate up to 45,000 workers will be lost.

Local Government is playing a strong role at the grassroots level in responding to the current crisis and supporting their communities, be they young, old, in business or volunteering. We are vital to maintaining cohesion and public health within our communities both now and into the future.

Without financial assistance in the form of access to JobKeeper, local government’s ability to service community needs will be undermined by the twin pressures of falling rate revenue and absent facilities revenue.

ALGA is pursuing this matter with urgency.

Mayor David O’Loughlin
ALGA President