Jon Sullivan (Longman, Australian Labor Party) Share this | Hansard source

I take the interjection from the honourable member for New England whom, I know, also represents regional parts of Australia—and I am sure he is going to mention some of the problems that occurred in his area in his contribution to come.

Local governments are struggling to provide both essential and aspirational infrastructure for their communities. This is evidenced by the massive oversubscription to the second stage of the government’s Regional and Local Community Infrastructure Program, known as the RLCIP. In November last year, $250 million was shared among all of Australia’s local councils, and a second $50 million was set aside for competitive submitters. Some $1.3 billion worth of submissions were received—submissions for projects which, were they to proceed, would enrich community life in our country enormously. That is, $1.3 billion worth of submissions for $50 million on offer. I am pleased to say that the local government which includes my electorate of Longman, the Moreton Bay Regional Council, was successful in that competitive process and received $3.8 million towards the construction of a state equestrian centre at Caboolture, which will be a joint project between that council, the federal government and the state government. In February, the government had to defer the $500 million to the RLCIP as part of the Nation Building and Jobs Plan stimulus package—an acknowledgement of the unmet need for community infrastructure and of the capacity of local government to move quickly on projects, thereby ensuring that the economy received the necessary boosts in a timely manner.

The federal government at all three levels of government has the necessary power and capacity to raise revenue. I understand—and these figures may not be accurate—that revenue raisings by local governments amount to three per cent of government revenue in Australia. State governments amount to another 19 per cent, meaning that the federal government raises around about 78 per cent of government revenue raised in Australia. As I say, whilst I cannot vouch for the absolute for the absolute accuracy of those figures, simply taking them as an indicator illustrates the magnitude of the problem. When it comes to day-to-day services and the facilities needed to provide those services, the local and state governments carry the burden of responsibility and are dependent in large part on the flow of funds from the federal government. Members of the committee recognise the absolute necessity of an ongoing infrastructure grant program to assist local government in particular but also to assist community groups to provide infrastructure sufficient for the needs of their community.

This final report and the interim report tabled last November have focused on principles which we believe will ensure that the ongoing program is fair and transparent. Together they seek to establish a framework on which a program with the objectives of assisting local communities in this way can be a truly AAA program—available, accessible and accountable. The report sets out clear guidelines about who should be eligible to access the scheme and what they are able to use it for. It seeks to have an application process that is both simple and adequately supported, so that assistance is available when it is needed. It places great emphasis on the need for diligent acquittal, appropriate to the size of the grant, to provide assurances of a fully accountable program.

Throughout the inquiry process, I developed a view that local councils’ priorities were routinely hijacked by requests from community groups seeking to access the former Regional Partnerships program for a matching contribution from council. The program recommended by this report seeks to eliminate that potentiality, but it does present a risk that community groups could be frozen out by any council. Recommendation 2 of the final report, which relates to the quantification of funding allocated to non-profit organisations, sends a message to councils that they need to be considerate of the needs of that sector, who have had their capacity to raise funds severely curtailed in recent years.

I want to address in part the dissenting comments from the deputy chair—and, by dint of his 16 years service on this committee and its predecessors, as I said, its elder statesman—the member for Hinkler, Paul Neville. Mr Neville laments the fact that the committee recommendations exclude the profit sector—that is, businesses—from accessing this program. I have said frequently throughout the process, as Mr Neville will attest, that in order to have regional development you have to have social development and economic development. Yet, as loudly as he bemoans the exclusion of the profit sector from this program, I will applaud it louder. The first report acknowledged the need for programs to assist economic development in the regions and indicated a view that it would be better managed by another portfolio. That is a view that I hold very strongly. There is no reasonable justification for social infrastructure having to compete with business proposals for funding in any community. The quarantining of the social and the economic, each drawing from a pool of funds allocated by the government according to government priorities from time to time, is by far a more transparent process and, dare I say it, much less open to the types of abuse we saw with the former government’s Regional Partnerships Program.

During the inquiry process the committee visited the electorate of the member for Hinkler. There we saw evidence of many successful businesses who had received grants, gifts of money, from the former government under the RPP. These businesses had developed new products and had provided employment in the community. One firm in particular received about a million dollars of government assistance to relocate to Bundaberg from Nambour. It is claimed that, without the gift of a million dollars from the government, their bankers would not have provided the finance to allow them to make the move. Yet this firm paid farmers in the Bundaberg region over $2 million in their first year for the cane trash on the paddocks after the cane harvest. It seems to me that that was a pretty solid business, that it probably had a pretty solid business plan and that it was not a business that the banks ought to have been reluctant to finance. I believe a culture was developing within banks to send regional business loan applicants to the federal government for some ‘free money’ before agreeing to assist them with bank finance. This, of course, greatly reduced the bank’s risks, but at a cost to the taxpayer. I know that I am not alone in finding that kind of behaviour unconscionable.

During the course of the public hearings in Bundaberg, witnesses who had received funding from the RPP agreed with me that businesses helped by governments should in some, if not all, instances have repayment responsibilities—for example, when an assisted business is sold or reaches sustainable profitability. Certainly the creation of jobs in regional areas is a legitimate consideration for government. However, money allocated for this purpose in successive budgets would be much more useful accumulating as it is repaid, so that each year more and more businesses can be assisted, rather than ultimately lining the pockets of clever and successful business people.

I have great pleasure in commending this report to the parliament. In closing, like all members, I want to acknowledge the good work of the members of the secretariat, in particular those who were heavily involved with this report—inquiry secretary Michael Crawford, and researchers Susan Cardell and Dr Brian Lloyd—who have served our committee with great distinction and served this parliament well in the report that they have helped us produce.

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