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Report on performance

Outcome 2-Regional outputs and programmes

Output 2.2.2-Local government

Highlights
Supplementary road funding for South Australia was extended.

Overview-Output 2.2.2-Local government

Output 2.2.2 is delivered by the Territories and Local Government Division.

Under Output 2.2.2, the Department administers Australian Government financial assistance grants to local governments. In 2006-07 the grants were distributed as follows:

around 30 per cent of funding was distributed as an untied local roads component. These funds are allocated between states according to fixed shares, and between local governments within a state on the basis of road expenditure needs; however, the funds can be spent on any local government expenditure priority;
around 70 per cent of funding was distributed as general purpose grants. These funds are allocated between states on the basis of population, and between local governing bodies within a state on the basis of relative needs. Funds are untied and can be spent on local priorities determined by councils;
overall, around two-thirds of the funding ($1.1 billion) went to councils in regional and rural Australia, including $28 million to Indigenous councils.

To maintain their value, the grants are indexed each year for changes in population and consumer prices.

The output includes two administered programmes:

Local Government Financial Assistance Grants; and
Supplementary funding to South Australian councils for local roads.

Table 4.26 summarises the output's performance in 2006-07.

Summary of performance-Output 2.2.2-Local government

Table 4.26 Summary of performance-Output 2.2.2

PBS/PAES performance indicators	Results
Effectiveness
Local governments are assisted to serve their communities	The Department administered funding that assisted local governments across Australia to deliver essential services such as planning and development, community services and infrastructure, including roads. The Department promoted and supported best practice in local government. In 2006-07 grants averaged approximately 9 per cent of local government revenue overall, but provided more than 50 per cent of the revenue of some councils.
Quality
Grants are allocated and distributed to local governments in line with national principles	In 2006-07 the Department administered financial assistance grants to Australia's local governments under the Local Government (Financial Assistance) Act 1995. Payments totalling $1.69 billion were made in 2006-07. The Department administered supplementary funding of $13 million to South Australian councils for local roads.
Better practice in local government is recognised and promoted (e.g. through a national awards process)	In 2006-07 the Department promoted local government successes and achievements through: the annual National Awards for Local Government; and an online database of the more than 2,000 projects nominated for awards since 1997. The 2007 National Awards for Local Government attracted nearly 300 entries, across 15 categories, including asset management, health and wellbeing, IT, strengthening Indigenous communities, ageing, and innovation in regional development. More information about the awards is available from the Department's website, at www.dotars.gov.au/local/awards/index.aspx.
Local governments are assisted to improve their land use planning and development assessment systems	In 2006-07 the Department supported the Development Assessment Forum to reform and harmonise Australia's development assessment systems. A key project was the development of a national electronic data exchange standard to facilitate the electronic processing of development applications. More information about the forum is available from the dedicated website www.daf.gov.au. The Department provided advice to Australian Government representatives on the Local Government and Planning Ministers' Council, and Secretariat services to the council.
Quantity
Funding and information are provided to some 700 local governing bodies across Australia^a	In 2006-07 information and funding was provided to 700 local governing bodies across Australia, including 91 Indigenous councils. As the Australian Capital Territory has no local government, its share was paid directly to the Australian Capital Territory Government.
Price
$2.2 million	The actual price of this output in 2006-07 was $2.2 million.
Overall performance

^a Performance indicator modified in the 2007-08 PBS.

Effectiveness indicators-Output 2.2.2

Local governments are assisted to serve their communities

The Department continued to implement the Australian Government's commitments made in response to the House of Representatives Standing Committee on Economics, Finance and Public Administration report Rates and taxes: a fair share for responsible local government (the Hawker report) in 2005.

In 2006-07 the Department provided advice to the government in relation to:

a parliamentary resolution on local government, which was passed in October 2006;
the terms of reference for a study by the Productivity Commission into local government revenue raising capacity, which were issued by the Treasurer on 4 April 2007; and
a report of the Commonwealth Grants Commission into the interstate distribution of the local roads grant component of the Financial Assistance Grants. The Australian Government announced its decision on the report in the May 2007 Budget. The government did not accept the Commission's recommendations on an interim redistribution of the local roads grants, and agreed to continue to provide supplementary road grants for local governments in South Australia.

The Department continued to administer funding that assisted local governments across Australia to deliver essential services such as planning and development, community services and infrastructure, including roads, as shown in Table 4.27.

The Hon Jim Lloyd, MP, the Minister for Local Government, Territories and Roads presented the 2006 National Award for Innovation to Campaspe Shire Council representatives Ms Mari Q, Ms Jean Andrews and Cr. Neil Repacholi at the 2006 National Awards for Local Government Presentation Dinner. (Photo DOTARS)

Table 4.27 Trends in local government

	2003-04	2004-05	2005-06	2006-07	2007-08 estimate
Financial assistance grants
Local road grants	$464m	$476m	$497m	$518m	$542m
General purpose grants	$1,045m	$1,072m	$1,121m	$1,170m	$1,219m
Supplementary funding for South Australian councils	-	$4m	$9m	$13m	$13m
Total grants	$1,508m	$1,552m	$1,628m	$1,702m	$1,775m
Bodies funded	722	703	701	700	697
Local government awards
Nominations closed	July 2003	July 2004	June 2005	June 2006	May 2007
Nominations received	335	250	286	215	289
Categories of award	19	18	16	18	14
Awards presented	November 2003	November 2004	November 2005	November 2006	October 2007
Price of output	$3.4m	$2.0m	$2.5m	$2.2m	$2.3m

Did you know

Each year the Commonwealth Government recognises the best practice achievements of local government through the National Awards for Local Government. These awards were initiated in 1986 as a means of recognising, rewarding and promoting the innovative and leading practices of local government. The awards, which highlight the outstanding achievements of local government across the country, are sponsored by a number of Australian Government agencies and administered by DOTARS.

In 2006, 215 entries were received from local governments nationally and awards in seven national categories were made-refer www.dotars.gov.au/local/awards

Administered progammes-Output 2.2.2- Local government

Table 4.28 Summary of performance-Local Government Financial Assistance Grants

PBS/PAES performance indicators	Results
Effectiveness
Local governments are assisted to provide essential services at the community level	The Department worked closely with local government grants commissions in each state and territory to allocate and distribute grants in line with national principles which ensure grants are distributed on the basis of the relative need of councils once a minimum grant requirement is met.
Quality
Grants are administered in line with the Local Government (Financial Assistance) Grants Act 1995	In 2006-07 the federal Minister for Local Government, Territories and Roads calculated the amount of grant funding to be allocated to each state as required by the Act. The Department administered the payment of grants in line with the requirements of the Act.
An annual report on the operation of the Act is tabled as soon as practicable after 30 June each year ^a	The report for 2006-07 will be tabled in September 2007.
Grants paid quarterly: 15 August, 15 November, 15 February and 15 May ^a	Grants were paid to states and territories in quarterly instalments on 15 August, 15 November, 15 February and 15 May.
Quantity
Grants are distributed to some 700 local governments ^b	Grants were distributed to 700 councils, on schedule.
Cost
$1,695.1 million	The actual cost of this programme in 2006-07 was $1,688.8 million.
Overall performance

^a Performance indicator first published in the 2007-08 PBS.
^b Performance indicator modified in the 2007-08 PBS.

Table 4.29 Summary of performance-Supplementary funding to South Australian councils for local roads

PBS/PAES performance indicators	Results
Effectiveness
Local governments have equitable access to Australian Government funding for local roads	To facilitate equitable access to funding for local roads, the Department administered supplementary Australian Government funding for South Australian councils. The 2004-05 Budget allowed for $26.3 million in funding, to be disbursed over three years.
Quality
Grants are distributed in line with the local roads grants component of financial assistance grants	Grants for 2006-07 were paid to the South Australian Government in quarterly instalments, with the first payment made on 15 August 2006.
Quantity/Location
Supplementary funding is distributed to 74 local governments in South Australia	Grants were distributed to all 74 councils, on schedule.
Cost
$13.0 million	The actual cost of this programme in 2006-07 was $13.0 million.
Overall performance

Outlook-Output 2.2.2-Local government

In 2007-08 the Department will:

maintain effective and efficient delivery of local government funding;
provide supplementary funding to South Australian councils for local roads;
make a submission regarding local government funding to the Productivity Commission review of own-source funding-this issue may also be considered by the Council of Australian Governments;
support the involvement and participation of the Minister for Transport and Regional Services in the Local Government and Planning Ministers' Council and related groups; and
deliver the National Awards for Local Government.

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