Local Government Funding

I seek leave to make a brief explanation before asking the Minister for State/Local Government Relations a question on federal government funding for local government.

The Hon. J.M.A. LENSINK: I understand that in July the minister visited the South-East to discuss the federal government's $140 million local council funding and the continual lack of funding for the Mount Gambier council compared with other regional councils. In fact, Mount Gambier previously received $1.9 million in 2011-12 compared with $4 million for Port Pirie, $4.1 million for Whyalla and $3 million for Murray Bridge, which is interesting considering its large population size. The local council stressed to the minister that the shortfall was delaying major infrastructure projects in the area. I understand that prior to these discussions a review was conducted into the methodology behind the allocation of funds. My questions of the minister are:

1.Has the review been completed and, if so, what are the findings?

2.Has the minister been made aware of the 2012-13 funding allocations and, if so, has Mount Gambier's previous funding disadvantage been taken into consideration in the new funding allocations?

The Hon. R.P. WORTLEY (Minister for Industrial Relations, Minister for State/Local Government Relations) (14:28): I thank the honourable member for her question. As part of the 2012-13 federal budget, the Hon. Wayne Swan MP, Deputy Prime Minister and Treasurer, outlined that $2.2 billion in commonwealth financial assistance grants would be provided to local government across Australia in 2012-13 to assist councils with provision of services to their communities. In September 2012 the Hon. Simon Crean, MP, Minister for Regional Australia, Regional Development and Local Government, approved the South Australian Local Government Grants Commission's recommended distribution of financial assistance grants for 2012-13.

For 2012-13 local government in South Australia will receive $148 million in total, an increase of 3.6 per cent over 2011-12. Approximately 60 per cent of these grants will go to regional, rural and remote councils. South Australia's estimated funding from the federal government comprises $111 million for general purchase grants, an increase of 3.3 per cent, and $37 million for identified local road grants, an increase of 4.4 per cent. South Australia will also receive $16.9 million in supplementary local road funding for 2012-13.

Unique to South Australia, the supplementary local road funding was extended to 2013-14 and will provide approximately $50.9 million to South Australia over this time. For 2012-13, $1.12 million of the $2.2 billion that will be provided nationally was brought forward and paid—I think that should be $1.12 billion of $2.2 billion to be provided nationally—in the 2011-12 financial year. South Australian local government received approximately $75.4 million of the early payment in June 2012. Allocation of the brought forward payment was based on the approved distribution for 2011-12.

In November 2010 the then minister for state/local government, the Hon. Gail Gago, met with the Australian government Minister for Regional Australia, Regional Development and Local Government, the Hon. Simon Crean, to argue for continuation of the supplementary local road funding that is unique to South Australia. As a result of this meeting, in March 2011 the government wrote to the federal members of Port Adelaide, Wakefield and Hindmarsh regarding the necessity of supplementary funding continuing in order that this state receive its fair share of local roads funding.

I received notification from minister Crean on 24 August 2012 that the commonwealth will undertake a review of the financial assistance grants program, to be conducted in two stages and completed by December 2013. South Australian local government authorities must be guaranteed they will receive their fair share of financial assistance grants, including road funding, but I welcome the review and the opportunity to provide input for South Australia. As part of the consultation process I will be reiterating the issues I have previously raised with the commonwealth minister.

The Hon. J.M.A. LENSINK (14:31): I have a supplementary. Given that the minister has not responded to any of my specific questions in relation to Mount Gambier, am I to assume that he is taking those on notice and will bring back a reply?

The PRESIDENT: That cannot be a supplementary if he has not answered.

The Hon. R.P. WORTLEY (Minister for Industrial Relations, Minister for State/Local Government Relations) (14:31): I will comment anyway, Mr President. The way the financial assistance grants are done is that part of the formula is based on the fact of providing a minimum basic standard of council services for councils within South Australia. That means that a remote council, like Orroroo Carrieton, which has a very limited capacity to raise rates and get money, actually gets a higher share or proportion than one of the inner city councils, which have a much greater capacity to raise money.

The Hon. J.S.L. Dawkins interjecting:

The Hon. R.P. WORTLEY: I am glad you get the big issues, John; I'm glad you really tackle the big issues. Your contribution is so valuable. What happens is that if there is a total pool of money, if a city that has the capacity to raise revenue by rates or whatever receives more money then less goes to those that cannot. It is just the way the formula is. So if more money was given to Mount Gambier—which, obviously, under the formula, has a certain capacity to raise money—less would go to those in Orroroo Carrieton or wherever. That would have a significant impact on the services they provide to their residents.

The Hon. J.M.A. LENSINK (14:32): I have a further supplementary.

The PRESIDENT: Are you sure this is supplementary?

The Hon. J.M.A. LENSINK: I am pretty sure it is, Mr President, arising from the original answer. In my original question I referred to several rural cities and made a comparison between their funding and Mount Gambier.

The PRESIDENT: What is your question?

The Hon. J.M.A. LENSINK: I would appreciate it if the minister would give me a specific response, or get one of his staff to if he is incapable of reading through my question and giving me a specific response.

The PRESIDENT: I am not sure whether that was a supplementary speech or something. The Hon. Mr Wade, and no comments about my tie.