Local Government (Rate Oversight) Amendment Bill

Mr PEDERICK (Hammond) (12:41): I rise to support the Local Government (Rate Oversight) Amendment Bill 2018. Before I go into the bulk of my speech, I am amazed, as members on this side are, that the Labor opposition do not have a position on the bill. Are they worried about whether the LGA will form a position on 3 August and that that will dictate what they say, or is there some infighting between the member for Lee and the Leader of the Opposition, the member for Croydon? What other tensions are going on across the other side of the chamber? Who would know?

At 16 weeks into government, and certainly many months before that, we made it perfectly clear that we would be introducing rate capping legislation within the first 100 days, which is exactly what has happened. This is about our party easing cost pressures for South Australian households and businesses. This legislation delivers more oversight, transparency and accountability for the local government sector. This rate capping policy strikes the right balance between keeping cost pressures down for South Australian households and businesses and facilitating the growth that we need in the local government sector.

This Liberal state government's priority is to keep cost pressures down, but we do not want it to get in the way of growth or the delivery of productive infrastructure and necessary services. That is why we have consulted with the local government sector and devised a rate capping scheme that will enable councils to still increase their rates if they can convince ratepayers and the independent regulator, which in this case will be ESCOSA, that the increase is necessary. Our government has a comprehensive reform agenda to ease cost-of-living pressures for South Australians, and capping council rates is a key part of that plan.

This is the first step of a significant reform journey for both state and local governments over the next four years. In a Marshall Liberal government, local government has a party in reform. We need to work together, and I have not yet seen a lot of that coming from sections of the Local Government Association.

Since we announced our rate capping policy, some councils have already tightened their belts and kept rate increases to a minimum, which is great news for their ratepayers. Rate capping will make councils more accountable to the people they represent and also ensure that councils look within for efficiencies and are not able to increase general rates on a whim. Over the last decade, council rates have increased at a rate three times the level of inflation, and it is simply unacceptable. With regard to my own farm property at Coomandook in the Coorong council, the amount I pay in council rates has doubled over the last decade, and I have been getting far fewer services.

South Australian households and businesses have been smashed with council rate increases over double the rate of the local government price index. Over the last 10 years, local government rate revenue has increased by 67 per cent compared with a 31 per cent increase in the local government price index over the same period. Their own price index is out of step with rate rises that have been put in place.

The City of Onkaparinga is one of the worst offenders when it comes to misuse of ratepayers' money. Their rate revenue has increased by a significant 74 per cent over the last 10 years. Treasury analysis shows that, over the same 10-year period, state government revenue increased by only 24 per cent. What a disparity.

The local government sector should accept rate capping to restore faith amongst their ratepayers. As I indicated, local councils are now holding meetings to determine their position on the legislation by 3 August. From there, it will go to the LGA Board for a sector-wide position. The rate capping process should give confidence to ratepayers that their councils are spending their money more wisely. We need to change the conversation from how much we can spend to how much more we can do with what we have.

In regard to some of the spending, I mentioned the City of Onkaparinga. Between 1 June 2014 and 31 January 2016, Mayor Rosenberg and Mr Mark Dowd, the chief executive officer, spent $69,643 on ratepayer-funded credit cards. Mark Dowd had a Kooyonga Golf Club membership worth $6,818. He has since paid that back but has since received a $7,000 pay rise. The Kooyonga Golf Club is nowhere near Onkaparinga.

The Hon. D.J. Speirs: It's disgraceful. There are golf courses in Onkaparinga.

Mr PEDERICK: Absolutely. If you are going to play golf with anyone, visitors from overseas or locals, why aren't you proud of your own local golf course? There are plenty in the Onkaparinga area.

The Hon. D.J. Speirs: Thaxted Park, Flagstaff Hill.

Mr PEDERICK: There we go—Flagstaff Hill, and there would be one at Willunga. The City of Onkaparinga paid $22,000 in legal fees to keep this membership fee a secret. Lavish spending included overnight accommodation in city hotels after functions, $18,000 on flowers and thousands more on Apple products, including an Apple watch for Onkaparinga chief executive Mark Dowd. They also spent $1,631 on an Adelaide Oval skywalk. How is this helping the ratepayers of Onkaparinga?

We just want to reiterate that the Local Government Association at a statewide level, in their campaign against rate capping prior to the 2018 state election, spent $174,338 on activities related to opposing the policy of rate capping. They also spent $37,462 campaigning against Labor's cost-shifting measures. The total spend was $211,800. Later, I will go into some of the spending habits of councils more local to me.

This bill also introduces a rate oversight scheme into the Local Government Act 1999. The bill amends chapter 10 of the act to insert part 1A, 'Rate oversight', which provides for the establishment, operation and reporting of a system to cap annual increases in councils' general rates. The bill provides a rate oversight framework that establishes three key elements: primary rate cap determinations, so you get the establishment of a rate cap; provisions enabling the cap to be set, determining that the cap applies to council revenue recoverable from general rates; and providing for its calculation on an annual basis for all councils.

ESCOSA will set the cap by 31 December and it could apply to all councils as a single cap, a class of councils or a single council. It will apply to general rates and will be a proposal to cap the base standard rate. The base standard rate is the total general rate revenue divided by the number of rateable properties on 30 June. The rate cap then applies to BSR to create cap standard rate on 1 July. The BSR also calculates total annualised rate revenue. Councils can capture all new rateable properties each year on an annualised basis.

Variation applications: setting out provisions to enable councils to apply for a variation of the rate cap by demonstrating engagement with their community on a variation, and that a variation is necessary within the context of the council's operations and long-term financial planning. ESCOSA will receive and assess the applications. Applications must be made by 31 March and variations can be requested for up to five years.

Monitoring and reporting: setting out provisions that enable monitoring and reporting on the rate oversight system to ensure both compliance and understanding of the effect of rate oversight on councils. ESCOSA will report annually on the compliance to the minister and ESCOSA will also report every two years on outcomes of the system. The rate oversight system will be managed by an independent regulator, ESCOSA as previously mentioned, and it will be responsible for making the rate cap determinations, receiving and assessing applications from councils for variations on the rate cap, and reporting on compliance and the outcomes of the system to the minister on a regular basis.

There has certainly been some pushback from a significant part of the local government sector on the proposed rate capping. They campaigned quite heavily during the election against Liberal members of parliament. They certainly campaigned against me. I know one of my local councillors was happy to be seen having coffee and dining with a previous leader, I guess you could say, of a party who did not win a seat in the house where it counts, whereas we won 25 and so we won the majority and we are here to govern.

It is quite interesting that in side comments I have heard over time I could see the process, especially on an individual basis. There was even a forum held in the Coorong council chambers in Tailem Bend with the same party involved. I thought, 'Well, that's a good look,' because basically they are saying, 'We don't want anything to do with the local member. We want to go this way because we are worried about rate capping.' As I said, I am here, we are here and we won the election.

It was interesting how blatant this was across the border. I know in other seats there was the same campaigning by people in the local government sector against sitting Liberals and Liberals who were candidates. We are not here to have a war with local government but if people want to take this adversarial attitude, I find it an interesting way to find a better outcome for the people, the ratepayers and taxpayers of this state, and that is certainly who we are here to look after. We are certainly here to pull back those cost-of-living pressures with our reductions in the emergency services levy of $360 million over four years.

Local government got caught up in this great excitement that they had power over the people to push back on rate capping. Most of them were in a frenzy of supporting either Labor or some other non-effective third party that did not get a seat in this place. They actually went out of their way, as I said, entertaining these people and colluding with them at times.

Mr Patterson interjecting:

Mr PEDERICK: Yes, exactly. We are here to get the right outcomes, and I do not think the adversarial approach works at all. I was at a function involving the Murray-Darling Association in the Riverland at one stage. Certainly, most of my area of Hammond comes under the Murraylands and Riverland Local Government Association area. We were at a function after hours and some of the local mayors said to me, 'With rate capping, you will get fewer services.' I said, 'Fewer than I get now?'

I pay double the rates I did 10 years ago, and in the Coorong the roads are so bad that some of them have hollowed out to just sand. You have to slow down to 50 or 60 km/h to go on them. I have just fixed up my old two-wheel drive ute, and I told the Coorong council that I will not drive it on their unmade roads because I did it once—I drove from Yumali to Meningie and back—and I thought I had spent too much on that vehicle to put it through that. When you hear stories about trucks going off the road because they have hit a great hole, or Toyota Prados suffering major damage, you have to wonder what the priorities are of local government.

Sadly, as has been said already here today, their priorities are on other things, such as art exhibitions, with too much focus on the towns. The CEO of the Coorong said to me in a meeting, 'Well, most of the ratepayers are in the towns.' I said, 'So how do the farmers get their supplies in and their produce out?' That seemed far from his mind, as someone who lives far from the community anyway, who does not use the local service provider for vehicles for the council anymore and who obviously, I believe, does not travel very far south of Tailem Bend too often.

The problem I have is when you raise these issues about what happened to the good old days of roads, rates and rubbish. Certainly, in the Coorong, my home council, the rubbish is paid for: you pay a fee. I am fortunate enough to have the rubbish run go on Parkin Hall Road behind my property, so I pay the fee and it gets picked up. That is separate to the rating issue. A couple of years ago, I rang the mayor about Parkin Hall Road and said, 'Parkin Hall Road is the worst I have seen it in my 54 years.' It took a couple of weeks to fix and it needs fixing again. If the Coorong council is taking any notice of this speech today, they might want to have a look at Parkin Hall Road again.

The sad thing is that you have people with city-centric views and people who are caught up on the local government bandwagon of trying to improve their own position, such as being on the chief executive officer run and looking to be promoted to another position. They are quite lucrative positions, depending on where you are in the local government sector.

But we also need local government members and mayors to take notice of their whole community, and I certainly do not see that in the main in my own community. I have been urging people, wherever they are in their council area, to put up their hands in November if they are not getting appropriate outcomes. We are certainly not getting it in the Coorong. They need to stand up. We need wholesale change. We need a clean-out, and we need a clean-out in the bureaucracy from the top down as well. That may sound harsh, but why do I go to meetings—

The DEPUTY SPEAKER: Member for Hammond, you have three minutes—

Mr PEDERICK: I seek leave to continue my remarks; I have a little bit more to say, Deputy Speaker.

Leave granted; debate adjourned.

Sitting suspended from 13:00 to 14:00.

Adjourned debate on second reading (resumed on motion).

Mr PEDERICK (Hammond) (15:40): With the few minutes I have remaining, I want to conclude my remarks on the Local Government (Rate Oversight) Amendment Bill, which is something dear to the heart of the Liberal Party.

I just want to note and make comments around the Coorong District Council. A Coorong ratepayers action group was formed, and I went to many meetings, and I know that the member for MacKillop went to some of those meetings. Over 500 people attended different forums between Tailem Bend, Peake and Tintinara with concerns about how their hard-earned rate money was being spent. That tells me that there are lots of questions for my particular council to answer.

It was interesting that the Adelaide Town Hall meeting the other day seemed to be a pretty one-sided meeting. It was a bit of a cheerfest for the LGA and its position against rate capping. They were talking about autonomy for local government. Local government only operates under the Local Government Act 1999, which is an act to form local government and other matters, so they are not going to have complete autonomy; it is just not going to happen.

I just want to reflect on how much federal money and state money—the federal assistance grants out of the federal government—goes into local government now. It is many, many millions of dollars, and in some cases 50 per cent of council income comes from these grants which have nothing to do with rates. It is interesting to note that some councils take the position that any money for roads—and Coorong does this—only comes out of grants, so their rates do not even go into the roads, and it shows, sadly.

At the meeting at the Adelaide Town Hall, I had a conversation with the Mayor of Southern Mallee, Andrew Grieger. We were having a fairly in-depth conversation about rate capping and its effects or non-effects on councils. He said, 'Well, road maintenance isn't legislated for, so perhaps we should legislate for it.'

I just want to reflect on a trip I did last week. I went on the road between William Creek and Oodnadatta, and I tell you what, I want that outback road maintenance crew down in these council-bound areas to do the roadworks because they could teach all our local governments how to build and maintain a road. That road between William Creek and Oodnadatta in the outback was a credit to that maintenance crew. It is far better than a lot of the roads in my council area and some of the other roads in my electorate. I support this bill and I commend its speedy passage through the house.