The Productivity Council has released the draft report I recently blogged about. They have done this ahead of time to maximise the Local Government sector’s opportunity for an informed response.
As the Productivity Council’s report will feed into the Government’s Local Government reform agenda, I interrupt my series on the reforms to include this.
After being briefed by the PC chair yesterday I am gratified at their efforts to truly understand the industry. They have consulted well. Their draft report, on the surface, recognises the constraints under which the local government industry operates. Their report certainly does not present as the Government, I suspect, may have expected.
They recognised that just under 50% of our activities are mandated. Activities over which we have no control. It recognised the cost shifting State Governments of both persuasions thrust upon local government. The chair preferred to call this cost sharing. Nonetheless it was recognised.
It also recognised the need for local government to develop in the non-mandatory areas in keeping with the needs of their community.
Finally, it recognises that wages growth in the sector has escalated beyond CPI. This is an important conversation in that wages represent 1/3rd of our costs.
In other words, the report demonstrates that the Local Government sector, by running a tape measure over it relative to each other, as being an efficient sector. This diagnosis albeit with a caveat that there is significant room for improvement.
The report, which can be read here, makes three distinct recommendations. They are as follows:
- Lift the capacity of local councils to identify and address opportunities to reduce their cost base and improve their operations.
- Facilitating bench marking by clusters of councils through an appropriate mix of incentives for councils to participate and expectations that they will report information publicly in a format consistent with the framework.
- Further lower council costs by addressing aspects of the relationship between the South Australian Government and local government.
The Commission is looking for a response from us (councils and the community) on the draft report. Before preparing the final report to be presented to the minister, they are asking us 19 specific questions they are still seeking answers to.
We have until the end of next month (October) to do this in order they meet the deadlines imposed on them by the Government.