Rate Capping Inquiry

28 September 2016

Mr SPEIRS ( Bright ) ( 11:29 ): It is a pleasure to be able to speak today on the inquiry into local government rate capping that was undertaken by the Economic and Finance Committee of South Australia's parliament. 

In May 2015, the committee gave bipartisan support to this inquiry when I proposed that we look into rate setting by local government. What unfolded was a really interesting period for the committee. I believe we went through a fairly detailed analysis of the processes and systems behind rate setting by the local government sector and eventually came up with two positions: the government had a position against the policy of introducing a rate cap on local government rates; and the opposition members of the committee (the member for Schubert, the member for Hartley and I) submitted a minority report which sought to support the introduction of a rate capping policy by the state government on local councils in South Australia.

I think the process that the committee went through to reach this position was a healthy one. It involved policy analysis and hearing evidence from a range of different sources—some for the introduction of a rate cap and many against the introduction of a rate cap. Those who were against the introduction of a rate cap were largely representing local councils which, you would imagine, would have a built-in bias against a policy which seeks to restrict their ability to raise revenue. This is a policy in which I strongly believe. People often say to me, 'Well, as someone who came from local government prior to entering state government, why would you be in favour of a policy which restricts the capacity of the local government sector to raise revenue?'

In fact, my time on local government is the reason that I am so supportive of such a policy. When I sat on the City of Marion council, which for over a decade raised its council rates by an average of 5 per cent per year, I was particularly troubled by that approach. An increase of that amount which is above and beyond CPI or inflation, eats into the discretionary income of households bit by bit. You can only sustain that for so long before you are putting a significant cost impost on those households. We know the cost of living is a significant problem for South Australian households. It is an issue that comes up time and time again and is brought up with me in my role as a local member of parliament.

People worry about the cost of utilities, the cost of groceries, the cost of fuel, the ever-rising emergency services levy, and the various taxes, fees and charges that are levied on them by our state government. People find this onslaught of charges increasingly limiting their ability to make decisions to improve their lives, to send their children to private school, to pay down their mortgage a bit more, and so on. We should be exploring anything that we can do, as a Liberal opposition or as a state parliament, to reduce the cost of living pressures facing South Australians today in difficult economic times and giving it serious consideration.

That is one of the reasons that I so strongly support rate capping. Is it going to be a huge year-on-year saving for households? Perhaps not, but every little bit counts. I remember when I was on the City of Marion council, people repeatedly said, 'We can raise our rates by 5 per cent or 5.5 per cent a year—or whatever they were proposing that year—because that is only the price of a cup of coffee each week.' Now that might be the case. It might be $4 or $5 a week, but that is on top of a $4 or $5 increase per week on electricity, water and the emergency services levy, so the cumulative effect of that is particularly damaging on a household budget.

As a state parliament, if we can find ways to reduce that coffee a week increase in people's expenditure on different aspects of life, whether it be rate capping or the emergency services levy reduction (which the Liberal Party has proposed as a policy moving forward into the election period in 2018), and if we can find these ways to reduce the cost of living within individual households in this state that can only be a good thing.

As a state parliament, I think we should be looking at the third tier of government, being local government in South Australia, and asking, 'Are there ways that we can help or assist or encourage local government, whether that be in a legislative way or not, to help them reduce the cost imposts that they are placing on South Australian households?' If a rate cap is required to encourage councils to cut their cloth more effectively and to look at efficiencies within the way that they do business, I am absolutely supportive of us going down that track. That is why I am a vocal proponent of the South Australian Liberal Party's policy to introduce a rate cap on local government rates.

Many times I have mentioned in parliament my concerns about local government. I have said many times that local government has the capacity to be the best tier of government because of its ability, on a day-to-day basis, to impact the lives of ordinary South Australians because of its relative closeness to our communities. Too often, rather than being the best tier of government, local government is the worst tier of government. It gets distracted and does not necessarily have the capacity among elected members to deliver the reforms that are needed and often it gets in the way of progress.

It gets in the way of economic development and it looks for ways that it can stop things from happening as opposed to looking for ways to make things happen, particularly when it comes to economic development. I see that time and time again, councils putting up barriers to planning, putting up barriers to businesses moving ahead, creating unnecessary rules and creating unnecessary red tape. I often say to the councils that fall within my electorate, 'It's not action that you need to take to create economic development that you need to look at, it's actually what you shouldn't be doing that you are currently doing that might have more of an economic impact.' I encourage councils across the state to look at what they can stop doing in order to stimulate their local economies and really have a different lens over their business when it comes to economic development.

In closing, I would like to re-emphasise my strong support for the introduction of a local government rate cap as proposed by the Liberal Party of South Australia. I think this is a valuable policy and one which our minority report, as presented by me, the member for Schubert and the member for Hartley to the Economic and Finance Committee, outlines in considerable detail. I would like to thank all the members of the committee who went into this inquiry with an open mind, I hope, and heard plenty of evidence over the year that this inquiry took place. Our minority report makes good reading and I would commend it to the house.

Extracted from Hansard