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Roads, Rorts and Rubbish

Josh Adamson

Josh Adamson

Josh is Research Manager at Mannkal.
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The City of Perth scandal was a high-profile illustration of how cavalier governance can lead local administrations astray. New research published by the Mannkal Economic Education Foundation, however, uncovers how the issues which plague local government run deeper than high-profile cases of rogue councillors.

Many of the problems Western Australians associate with local governments are long established and will not be unfamiliar.

A lack of accountability, contempt for procedure, and excess bureaucracy have allowed the interests of ratepayers to become not only secondary, but more worryingly, treated with contempt by the governments which are meant to serve them.

The recent Local Government Act Review had potential to rectify these problems, but its findings did not encompass the most important issues facing ratepayers. Another review, conducted by WA’s Legislative Council, was thorough but is unlikely to attract the level of support required to drive the necessary change.

So, what exactly must be done?

Australian democracy needs a healthy federalist system. This is only possible where each level of government has its role clearly defined, and each level of government respects its own jurisdiction. Many of these issues can be traced back to the ambiguity of the Local Government Act 1995.

The responsibilities of local government are not clearly defined within the Act, which goes some way to explaining why the functions local government fulfills have so drastically expanded. To track these growing expenditure commitments, council rates have increased by 63% over the past decade. Only the costs of tobacco, electricity, water, medical and childcare services have increased faster over the same period.

Amending the Local Government Act to more clearly define the responsibilities councils should fulfill is one way to achieve this, and would have the added benefit of reducing cost-shifting by the state onto local governments. Another alternative might be adopting local constitutions which give residents more of an opportunity to weigh-in on which functions they believe their council should fulfill. Any reform to the Act must also clarify roles and abilities of elected councillors to access to information and oversee and publicly comment on local government administrations.

Another issue is the extensive network of cross-subsidies which currently exist within and between local governments. These policies are well-intentioned but create considerable inequity between groups of ratepayers. Rate reductions granted to pensioners, for example, commonly result in low-income families and households funding the tax concessions of asset-rich pensioners. Cross-subsidisation also occurs where local governments provide private goods and services such as community pools and gyms. Local governments charge users less than the cost of provision for these services, and the difference is funded by ratepayers who do not use the services through the common tax pool. Prices should be raised to reflect the cost of provision, especially where these services, like gyms, are readily provided by private businesses.

Local government voting systems also require improvement. Due to low voter turnout and a simple (more than half) majority voting system on policy, local government can implement ideas that have negligible community support. One potential solution is to require a two thirds majority to pass votes in order to reduce the prevalence of “logrolling”.  

Finally, the power of the Western Australian Local Government Association (WALGA) must be curtailed. WALGA performs several legitimate functions, however the organisation represents the interests of member local governments, not ratepayers. WALGA should not remain constituted under Local Government Act 1995, its role as a lobby group must be clarified, and its influence on legislative and regulatory decisions diminished.

Policymakers must properly understand the extent to which local government has drifted from servicing local communities in the way any administration should. With a state election devoid of meaningful proposals for reform rapidly approaching, such policies will attract widespread electoral support from community members fed-up with council bureaucracy and ineffiency.

Ratepayers deserve better, and all West Australians can benefit from more accountable, equitable and effective local governance.

Mannkal’s local government paper is now available here.

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