It pays to be united

The following is a brief summary of the draft action plan as described by Brian Dollery printed in the Sydney Morning Herald on Tuesday 7th February 2012.

Draft Destination 2036 Action Plan

Following the historic Destination 2036 Workshop in Dubbo in August 2011, at which NSW Minister for Local Government Don Page met with mayors and general managers gathered from all NSW local authorities, a Destination 2036 Outcomes Report was prepared which summarised Workshop proceedings and listed draft 'outcomes' under five main clusters: function, structure, governance, finance and capacity. Submissions to the NSW DLG were invited on the Destination 2036 Outcomes Report.

On the basis of the report and submissions received, A Draft Destination 2036 Action Plan was prepared which grouped the suggested actions into 'achievable initiatives', with 'key activities', under the relevant 'strategic directions'. The Draft Destination 2036 Action Plan was published in December 2011 and submissions invited by 12 February 2012.

While Minister Page and his team of advisors in the NSW Division of Local Government are to be congratulated for taking decisive action, unfortunately the Draft Destination 2036 Action Plan is seriously flawed in its current form.

In the first place, the Draft Destination 2036 Action Plan strongly supports much more extensive use of collaborative activities between local councils. However, it exaggerates the benefits likely to flow from shared services and thereby falsely inflates their impact on the financial crisis in NSW local government. The Draft Destination 2036 Action Plan should thus be re-drafted to reflect more realistic gains.

Secondly, the Draft Destination 2036 Action Plan under-estimates the barriers to the introduction of shared services, which includes the vital need for shared service arrangements to achieve widespread acceptance in the sector, which is best secured by ensuring that shared services remain firmly within the local public sector, rather than be outsourced, privatized or incorporated, and that shared service entities use sound governance models, such as the familiar county council model, and operate under existing NSW local government employment awards.

While many of the elements contained in the Draft Destination 2036 Action Plan 'Strategic Direction: Financial Sustainability' represent welcome initiatives, the size of the NSW local government backlog is so immense that these measures come nowhere near solving the problem. A final version will have to be revised to provide a realistic account of the size of the NSW local government infrastructure backlog. As it stands, the Draft Destination 2036 Action Plan does not accurately define the dimensions of the problem nor does it place the problem in national context. This will have to be corrected in the final version of the Destination 2036 Action Plan.

The NSW local government infrastructure backlog has arisen at least partly because Commonwealth and NSW government transfers to local government have not kept pace with the fiscal demands placed on the local government sector. This has meant that private capital funding has become essential for remediation of the infrastructure crisis.

Under these circumstances, a NSW bond bank provides a feasible method of enabling the NSW local government sector to secure access to long-term private capital to tackle its infrastructure shortfall. The Draft Destination 2036 Action Plan should thus be revised to include a NSW bond bank as an option.

(Professor Brian Dollery is Director of the Centre for Local Government at the University of New England.)