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Mackay hosts LGAQ annual conference

In his address at the recent Annual Conference of the Local Government Association of Queensland (LGAQ), then Acting President, Councillor Paul Bell pointed to the major benefits from Councils having one strong united voice. “Common purpose and unity are indeed powerful tools,” Councillor Bell said.

He said the importance of staying united is reflected in Queensland councils receiving twice as much in grants from the State Government, and having more powers than councils in any of the other states. “Joint initiatives through LGAQ also saves councils thousands of dollars each year, such as our Local Buy Scheme,” he said.

Councillor Bell said that it is not, and won’t always be, easy sailing with the State Government. He said the challenge ahead is not to argue about the size of the slices but to work together to argue for a bigger cake.

After being Acting President, with Noel Playford not seeking re-election at the Council election earlier this year, Councillor Paul Bell was duly elected President during the conference.

In his keynote address title, Funding Public Infrastructure, Geoff Allen from the Allen Consulting Group said building and upgrading infrastructure plays a substantial role in economic growth.

“Moreover, the quality of our built infrastructure is a key factor in our competitiveness in the global marketplace,” he said. “Added to this is the social dimension – the liveability and sustainability of our cities, towns and regions.”

Geoff Allen told delegates that for the past two decades public infrastructure spending in Australia has not kept pace with economic growth.

“Capital outlay by Local Government over this period has been constant,” he said. “The major cut has been at the Commonwealth level.”

Geoff Allen said that running budgets in surplus is now seen as a Key Performance Indicator (KPI) for Governments, and this trend is likely to continue at both Federal and State levels.

“Funding infrastructure through taxation is fair so long as the benefits are evenly spread,” he said. “However, with low taxes increasingly becoming another KPI for governments this source of funding is also limited. Funding infrastructure through borrowing enables governments to spread the costs of major projects over a longer period of time and communities gain the benefits sooner. Unfortunately governments have developed a public debt phobia.”

He said over the past decade our debt ratio to our Gross Domestic Product (GDP) has fallen dramatically from 20 per cent to 4.6 per cent.

“In Australia we have become excessively conservative compared to other OECD countries. In Japan, the debt ratio has increased over the same period to around 80 per cent as the Japanese Government uses public infrastructure development to stimulate economic growth. In the US, the debt ratio is also much higher than here.” See the graph below.

Geoff Allen said that all infrastructure funding options have their pros and cons.

“User charges for example have a direct effect on household budgets and therefore a negative impact on the economy,” he said. “Governments should realise that spending on infrastructure brings economic and social benefits. You need to reframe the debate about public debt. So long as Local Governments are able to service their debt it is a viable option.”

He advocates Local Government do the hard analysis and creditable research to clearly demonstrate the benefits, as well as highlight the problems that will be averted from failing infrastructure. “Politicians at all levels need to take a long term view that borrowing is good long term public policy,” Geoff Allen said.

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