Issue 2, April 2011 

State Government engagement

Since the state election the MAV has been working hard to connect with the new Coalition Government, but as has been reported regularly in the media, this is not always easy. While the Government has been establishing it offices, staff and processes there have been less opportunities for peak bodies and industry groups to engage in a meaningful way.

Notwithstanding this, the MAV has held numerous productive meetings with the Minister for Local Government, Jeanette Powell; her Parliamentary Secretary, David Morris; the Minister for Children and Early Childhood Development, Wendy Lovell; the Minister for Health and Ageing, David Davis; and the Minister for Education, Martin Dixon. We also have an upcoming meeting with the Minister for Planning early next month; and Ministers Powell, Ryan and Lovell have all committed to regular meetings with us.

As reported to you in March, I wrote to the Premier and Minister Powell requesting the commencement of a discussion to fulfill the Coalition’s election commitment to renegotiate a Victorian State-Local Government Agreement (VSLGA) immediately upon taking office. I am pleased to report that Minister Powell recently confirmed she would be meeting with the MAV to progress this matter in the near future.

I believe the VSLGA is a critical framework to guide collaboration and partnerships between our two levels of government, particularly in relation to whole-of-government engagement with our sector including negotiations, consultations, communications, and funding arrangements. There is clearly room for improvement, particularly in the planning portfolio where there’s a continuing trend of changes being introduced before adequate engagement with the sector.

Next Tuesday will also see the new Government provide funding to fulfill many of its election commitments, and we hope to see some good news for councils in the State Budget.

In the news...

Annual rate rise stories have again commenced, with the Herald Sun reporting some metro council data today. While only percentages have been reported, generally we expect rates increases will result in property owners paying an average $50 to $100 more this year, with cost pressures including rising landfill levies, the superannuation shortfall, plus increased regulatory and emergency management obligations. The MAV will again be collating council budget and rates data for release in June, and the survey will be sent to all councils shortly. Following the Federal Budget in May, the latest Local Government Cost Index forecast will be available.

This week, the Australian newspaper reported the Victorian Government has a $21.7 billion unfunded superannuation liability, up from $10 billion in 2006-07. Meanwhile, as reported in a recent MAV Bulletin, the Treasurer has rejected a request from the MAV for local government to access borrowings through the Treasury Corporation of Victoria (TCV) to help fund the $71 million LAS superannuation shortfall. The Government response suggested council access to TCV borrowings would substantially increase the level of financial risk to the state.

Lots happening in planning

As always, the planning portfolio is the focus of much activity, and media reporting. This week we’ve seen reports of voluntary land buybacks for both the Lower Loddon floodplain, and high bushfire risk areas.

Coastal planning has also been in the news. The MAV Bulletin this week highlights concerns I have written to Minister Guy about, including extended delays while councils await State guidance materials to help make consistent, informed development decisions for coastal land affected by predicted sea level rise. My letter also responds to the Minister’s criticism of councils in an interview on ABC radio last week.

And of course, there is the latest unsurprising stance by the Master Builders Association reported in today’s Herald Sun, calling for councils to be cut out of the development equation for “small residential developments”, which seem to include anything from dual occupancy to apartments. Meanwhile, The Age has reported on new research calling for a higher number of dwellings per hectare in growth areas.

Regulation reduction and performance benchmarking of LG

With 34 councils having now completed the first pilot report for the Essential Services Commission’s benchmarking report of local government services, the MAV will be meeting with the ESC in coming weeks. A range of MAV STEP Asset Management and Insurance data was identified by the ESC for inclusion in their proposed indicators.

While the Government will need to legislate to require councils to participate in the ESC’s new reporting regime, the MAV maintains the position we put to the former government. Any new reporting requirements should only be introduced after there is substantial reform to reduce the onerous reporting obligations that already exist. The ESC process identified well in excess of 100 existing reporting obligations for councils, and without genuine attempts to assess, remove and reduce this duplicated and unnecessary burden, there should be no additional obligations imposed on the sector.

The MAV remains supportive of transparent reporting that ensures local government is both accountable for its performance and can use published performance data to improve its service delivery. However, reporting should measure the effectiveness of service performance in a meaningful way, not simply report outputs for reporting’s sake.

The concerns raised by the MAV about the cost impacts of this new regime, particularly for rural shires have not yet been addressed. The Allen Consulting report commissioned by the MAV last July identified a disproportionately higher cost burden would be imposed on rural councils, most notably from the proposed obligation to calculate greenhouse gas emissions. We will continue to advocate strongly on this matter to both the ESC and the new Government.

Timing of local government elections

Earlier this month the MAV circulated a Members Brief and sought urgent feedback from councils in relation to the Coalition election policy to bring forward local government elections by six weeks to the second Saturday in October.

The Coalition policy was developed in response to an MAV State Council resolution. However in giving effect to this change, the MAV Brief highlighted analysis outlining the impacts arising from overlap with the October school holidays, including additional costs to councils and reduced voter participation.

A total of 54 councils responded to our request for feedback, with 26 supporting the fourth Saturday in October; 15 supporting no change; and 13 supporting the second Saturday in October. The MAV has now written to the Minister for Local Government to advise that the date least impacted by school holidays, and therefore the preferred election date, is the fourth Saturday in October.

The MAV is hopeful the Government will take on board this feedback from councils when drafting the legislation to ensure minimal adverse impacts on both council costs and community participation.

MAV Draft Strategic Work Plan

Following eight strategic planning sessions held by the MAV in March, the Board has met to review the Draft 2011 MAV Strategic Work Plan. The broad work plan addresses core issues impacting local government in Victoria. Actions are based on our capacity to assist councils to effectively and efficiently carry out their operations in the context of economic uncertainty, fiscal constraint, a new State Government and a minority Federal Government.

A smaller number of issues have been identified in the draft plan as high priority. These are based on issues consistently identified by members through consultation sessions. Focusing this way will enhance the MAV’s capacity to direct our limited resources towards achieving the best outcomes for Victorian councils.

The draft plan was circulated last week to all MAV Representatives and Chief Executive Officers for feedback. I encourage you to take the time to review it and provide any comments back to ikelly@mav.asn.au by 4 May. The Board will meet again to consider your feedback and make any amendments necessary before putting the plan to State Council on 26 May.

Meeting with Minister Garrett on kindergarten reforms

Early next month the MAV has our long-awaited meeting with Minister Garrett to discuss the COAG reforms to kindergartens, and the funding still required in Victoria to implement these changes by 2013.

While the Federal Minister met with his state counterparts at the Ministerial Council for Education, Early Childhood Development and Youth Affairs this month, the Allen Consulting mid-term report that is assessing the transition progress to achieve universal access was not tabled. The MAV understands this report is now not expected to be available until at least June, which is disappointing given the review work was undertaken last year.

At the meeting with Minister Garrett, the MAV will continue to advocate the urgent need for $600 million in capital funding and an extension to the transition arrangements. The funding shortfall was identified through last year’s statewide capacity assessment reports as essential to ensure the availability of enough facilities to provide 15 hours access without any loss to three-year old preschool programs, increases in parent fees, or introduction of waiting lists. I will report back to you on the outcomes of this meeting.

If there are any matters you’d like to raise or discuss with me, please don’t hesitate to call on 0437 984 793 or email me at bmcarthur@mav.asn.au.

Regards

BILL