Chapter 5 : Infrastructure

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This chapter discusses some of the challenges facing local government in providing and maintaining its infrastructure. The chapter begins with an estimate of the value of local government infrastructure. It then examines Federal funding for local roads, state infrastructure studies and strategies to improve management of local government's infrastructure. The chapter concludes with an examination of the data available on local government expenditure on environmental and natural resource management and of the impact of salinity on local government infrastructure.

Local government responsibilities

Local government plans, develops and maintains key infrastructure for its communities. Local government provides and maintains infrastructure such as local roads, bridges and footpaths; water and sewerage in some states, drainage, waste disposal, and public buildings. Local government also has planning responsibilities that affect the provision of infrastructure, whether by government or by business. These responsibilities include rezoning of land, subdivision approval, town and environmental planning, development assessment and building regulation. Through traffic management, local government seeks to minimise the urban environmental impacts of transport infrastructure such as congestion, noise and pollution. Local government also provides a range of social infrastructure such as recreational and cultural facilities and in smaller communities, through its leadership, it makes a major contribution to human capital infrastructure.

In recent years a number of studies have highlighted concerns about the condition of local government infrastructure and its impact on local communities. These include studies of local government infrastructure in Victoria, South Australia and Western Australia, the Rural Roads Congress in Moree and Mildura, and the Final Report of the Regional Australia Summit Steering Committee issued in December 2000. In June 2001, the Commonwealth Grants Commission delivered its report on Federal financial assistance to local government. The report noted a long-term trend for local road maintenance to be downgraded in importance relative to provision of human services.

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What is infrastructure?

Infrastructure comprises the assets needed to provide people with access to economic and social facilities and services. Infrastructure facilities have high capital costs, are time consuming to plan and build, are durable and have low operating costs, and are often networks. They often have environmental and social benefits that are not fully recovered by user charges. Infrastructure comprises:

• economic infrastructure - physical facilities such as roads, rail, ports, airports, reservoirs, reticulated water, sewerage, levees, drainage and irrigation facilities, telecommunications, power generation and electricity and gas distribution;
• social infrastructure - such as housing, educational, recreational and law and order facilities that support the community's need for social interaction; and
• human capital infrastructure - intangible assets such as the educational, skill and health characteristics of populations, that contribute to the productive potential of the community.

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Valuing local government infrastructure

The Australian Bureau of Statistics estimates that at June 2000, local government owned land and fixed assets worth $143 billion. Land was worth about $40 billion. Buildings, other construction and infrastructure and plant and equipment are worth almost $103 billion (see table 5.1). Note this figure is net of depreciation that is, the infrastructure is valued in the condition it is now. State studies use current replacement cost to value infrastructure.

Table 5.1: Value of selected local government infrastructure, 1999-2000 (fixed assets) $million (net of depreciation)

The local government sector has no net debt. At 30 June 2000, it had cash, and other investments worth $6.532 billion and $5.691 billion in loans leaving a net surplus of $841 million (Australian Bureau of Statistics Catalogue No 5512.0, table 30).

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Commonwealth Grants Commission of Inquiry

Local government capacity to fund infrastructure is constrained by its general fund-raising capacity. Local government raises about $16 billion per year. Most funds come from rates and user charges.

The Federal Government supplements local governments' own income with annual local government financial assistance grants. In 2001-02 the grants will be $1.374 billion, comprising $951.8 million in general purpose grants and $422.3 million for local roads. The funds are untied. Councils can spend them according to local priorities.

The Commonwealth Grants Commission review of the operation of the Local Government (Financial Assistance) Act 1995 found that, since the introduction of the original Act in 1974-75, local government revenue from all sources has grown at 10.1 per cent per year. Federal Government assistance to local government has grown even faster at an annual average rate of 10.8 per cent, but State assistance has grown at the much slower rate of 6.6 per cent.

The Commission found that local government is increasingly providing human services (social welfare type services) at the expense of traditional property-based services (particularly roads). Although road expenditure remains the largest function, the Commission found its importance has declined from about half of total expenditure in the 1960s to a little more than a quarter in the 1990s. The Commission reports that community pressure to broaden the range of local government services; unfunded mandates from other spheres of government; and revenue-raising restrictions (rate pegging, fee capping and rate concessions/ exemptions) have all contributed to downgrading the importance of maintaining local road infrastructure.

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Federal Roads to Recovery programme

In November 2000, the Federal Government announced a $1.2 billion boost in its funding for local roads through the Roads to Recovery programme (see table 5.2). In May 2001, it provided an extra $8 million for roads in unincorporated areas. The Roads to Recovery programme is for four years. It aims to provide councils with the financial capacity to repair roads that are approaching the end of their life. The grants are paid directly to councils and are additional to the annual Federal local government financial assistance grants mentioned above. Some $850 million of the Roads to Recovery money will be spent in rural and regional Australia.

Table 5.2: Roads to Recovery funding ($m)

In the programme's first year councils sought funding for projects worth more than $350 million. Of this, 44 per cent was for reconstruction, rehabilitation and widening of existing roads, 30 per cent was for re-gravelling, sealing and resealing work and 11 per cent was for bridges and drainage work.

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Victorian local government infrastructure study, 1998

In January 2000, Victoria's Government released a pioneering stocktake of its local government infrastructure undertaken in 1998, called Facing the Renewal Challenge. The report valued Victoria's local roads, the bridges, footpaths, drains, parks, recreational facilities and public buildings at $23.3 billion in current replacement cost. It put long-term consumption of these assets at $704 million per year and renewal and maintenance at $471 million per year, leaving an annual infrastructure deficit of $233 million per year.

Of these assets, 64 per cent were in transport (roads, bridges and footpaths). The report states, on page 10, that, of the total amount of asset renewal required in the period 1997-2002, roads account for 60 per cent. It estimates the replacement value for local roads in Victoria at $12,806 million plus $607 million for bridges.

The report noted that councils were unable to distinguish between capital spending designed to renew existing services, and that designed to improve existing services or extend services to a greater number of ratepayers. It notes that this distinction is fundamental to informed asset management.

A reference group has now been established comprising representatives from the local government peak bodies, VicRoads, the Department of Treasury and Finance, the Office of the Auditor-General and the Department of Infrastructure to improve asset management culture throughout local government in Victoria.

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South Australian local government infrastructure study, 2001

The Local Government Metropolitan Chief Executive Officers' Association commissioned Dr Penny Burns and others to conduct an infrastructure study in South Australia. The report, entitled A Wealth of Opportunities, foreshadows a looming local government infrastructure-funding shortfall in South Australia over the next 20 to 30 years.

The study found that South Australian councils have $8 billion in assets and $200 million in net debt. The assets are primarily in roads and footpaths ($4.8 billion), buildings ($1.2 billion), storm drains ($1.1 billion) and parks ($75 million) valued at their current replacement cost. The average annual cost of renewing these assets is about 2 per cent of their value or $160 million per year.

The key finding is that South Australian councils are under-funding infrastructure maintenance by $105 million per year. Councils currently invest $55 million a year on asset renewal (7 per cent of council revenue), but they need to spend $160 million a year now (19 per cent of council revenue) rising to $240 million in 25 years to maintain existing infrastructure. The situation is more acute for rural councils: they need to quadruple their renewal spending now. Their average annual asset consumption is about $64 million per year, but they are spending less than $20 million per year on asset renewal.

In the media release for the launch of the completed study on 2 July 2001, the contributing organisations indicated the infrastructure deficit has arisen because of:

• community demand spurring new asset spending over asset maintenance;
• Federal/State/developer 'gifting' of assets without ongoing maintenance funds;
• asset growth in the 1950s and 60s which now needs replacement or renewal;
• inadequate funding of maintenance; and
• community pressure to keep rates low.

The study says that more funding, by itself, will not solve the asset management problem and could well exacerbate it. It suggests:

• improving management and maintenance practices;
• educating the community about the lifetime costs of infrastructure decisions;
• redirecting funds to renewal of assets and/or increasing council rates;
• borrowing to spread costs over the life of infrastructure;
• working with Federal/State governments on infrastructure issues;
• asset management training for staff and elected members;
• service provision with the private sector, other councils and community bodies; and
• selling, demolishing or not renewing low priority assets (p.i).

The Federal Government is providing funding to the Local Government Association of South Australia, under the Local Government Incentive Programme, to establish guidelines and a database that will help councils, the State Government and the Local Government Grants Commission facilitate local road funding decisions and improve transport and infrastructure planning. The database is being managed by the Local Roads Advisory Committee in conjunction with the South Australian Office of Local Government. The State has also provided an additional $2.2 million for regional roads in its Regional Roads Programme commencing in 2000-01.

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Tasmanian Auditor General Report, 1998

In May 1998, in the Special Report No.26, Capitalisation and Reporting of Road Assets in Tasmania, the State Auditor-General made an assessment of council asset reporting practices and recommended improved data collection and reporting. The report put the replacement value of Tasmanian local roads at more than $2 billion and its bridges at a further $85 million.

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Western Australian local road infrastructure

Western Australia has not produced a local infrastructure study. However, Western Australia has unique and successful local road planning arrangements, which are reducing the gap between local road funding needs and local road expenditure. Importantly, these arrangements separately identify road preservation needs and expenditure.

Western Australia allocates 7 per cent of its Federal local government financial assistance grants to special roads projects (one-third for roads serving Aboriginal communities and two-thirds for major bridge works). The remaining 93 per cent is spent in accordance with road preservation needs determined by the State's Local Government Grant Commission's Asset Preservation Model. The model assesses the average annual cost of maintaining each local government's road network and has the facility to equalise road standards through application of minimum standards. These standards help local governments that have not been able to develop their road systems to the same standard as more affluent local governments.

In the mid-1990s the Western Australian Government, with the Western Australian Municipal Association and community groups, developed a series of regional road strategies, which defined strategic road networks and developed a master-plan called Roads 2020 for local roads throughout the State. The Western Australian Government and Western Australian Municipal Association have since signed a five-year State Road Funds to Local Government Agreement commencing in 2000-01, which provides over $90 million per year to councils for local roads. This is a big increase on amounts provided in previous years (for example, $58 million in 1997-98). The main features of the agreement are:

• Local government-elected representatives can participate with the State Government in determining the preservation and expansion of the local road network, together with traffic management projects from both a regional and State-wide perspective.
• One-quarter of the State's road-related revenue (for example, vehicle registration charges and fuel franchise fees) is available for local roads, with a guaranteed minimum allocation of $90 million per year for each of the five years.
• An advisory committee with State and local government representation makes recommendations to the State Transport Minister on how these funds should be spent.
• Ten regional road groups have been established with a membership of elected local government representatives to make recommendations to the advisory committee on the annual local road programme for their region.
• Road funds are allocated on the same asset preservation model used by the Western Australian Local Government Grants Commission to distribute Federal local government financial assistance grants for local roads.
• Virtually all (134 of the 142) Western Australian councils use the same 'ROMAN' database to support the road needs analysis.
• Each year, councils provide statistical data to the Western Australian Municipal Association for publication in their Local Government Road Assets and Expenditure Report, which the Association describes as a comprehensive assessment of the state of the local road network, current expenditure patterns and road funding needs and deficiencies.

The 1999-2000 Assets and Expenditure Report states that Western Australian local roads had a replacement value of $10.4 billion at 30 June 2000 and a written down value of $6.87 billion (66 per cent of replacement value). The percentage for a well managed road network would be about 75 per cent.

Local government expenditure on roads was $323.6 million in 1999-2000 (an all-time high). Road preservation cost $223.9 million and $99.7 million (30.8 per cent) was spent on new roads and extensions to existing roads.

Western Australian councils are narrowing the gap between road preservation needs and road spending at a rate of about 10 per cent per year. Councils should be spending $283.7 million per year on road preservation, but are spending $223.9 million, leaving a 1999-2000 deficit of $59.8 million. This is a reduction compared to the $74.7 million deficit in 1997-98 and the $66.7 million deficit in 1998-99.

The provision of an extra $45 million per year under the Roads to Recovery programme (see table 5.2) plus an extra $32 million in State funding since 1997-98 (see table 5.5) would erase the $59.8 million per year deficit.

The Institution of Engineers Australia Report Card recommended all States consider the Western Australian model. Queensland has already done so (see box). Some Western Australian councils are now going one step further and are piloting regional transport planning arrangements (see box).

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Road funding responsibilities of each sphere of government

Australia has about 810,000 kilometres of public roads: about 326,000 kilometres are sealed and 484,000 kilometres are unsealed (unformed, formed or gravel); and almost 640,000 kilometres (80 per cent) are local roads (see table 5.3).

Table 5.3: Local road length by State in 2000-01 (km and %)

Under the 1991 Premiers' Conference Agreement, the Federal Government funds National Highways; State Governments fund arterial roads; and local governments fund local roads. Together they spend about $7 billion per year on Australian roads (see table 5.4).

Table 5.4: Funding of roads by sphere of government, 1997-98 ($m)

In practice, councils' limited revenue-raising capacity sees both Federal and State Governments contributing to local road funding. The Bureau of Transport Economics study Spending on Local Roads shows that in 1997-98, local government spent $2,713 million on local roads (see table 5.5). The study shows that $1,930 million was from their own funds, $365 million was provided by the Federal Government, $293 million by State Governments and $125 million was provided by the private sector (mainly new estate developer contributions). It also shows that some State Governments have lifted their road funding contributions to local government since 1997-98, particularly Western Australia, Queensland and South Australia while in 1999-2000, Queensland lifted its contribution to about $56 million.

Table 5.5: Local road funding by sphere of government, 1997-98 ($m)

Not all this spending is on asset preservation. Some is spending on new roads. In Western Australia, for instance, 31 per cent of local road funding is on new roads and extensions to existing roads and 69 per cent is spent on asset preservation. In Victoria in 1999-2000, $360.6 million was spent by local government on local roads, with $114.7 million (32 per cent) of that spent on new and upgraded roads and almost $246 million (68 per cent) spent on maintaining them (Australian Bureau of Statistics Catalogue No 5501.2).

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Local government agrees on a rural road strategy

The Rural Roads Congress, held at Moree in March 2000 to consider rural road funding and planning issues, appointed a steering committee. The committee released the Moree Rural Road Funding Report at the 2nd National Rural Roads Congress in Mildura, Victoria in 2001. It recommended ways for the three spheres of government to work together to address aging road infrastructure in rural and remote areas. At Mildura, local government representatives welcomed the report and agreed to build a case for adequate long-term ongoing funding for maintenance of these roads.

The five priorities endorsed by the congress were:

• to obtain standardised solid data on the benefits and cost of local road expenditure by councils;
• to demonstrate the effective use of investment in local roads infrastructure;
• to undertake a detailed analysis of future transport infrastructure requirements and how it can be funded, on a national basis;
• increased cooperation between local and State governments and industry bodies at the regional level; and
• demonstrated performance by benchmarking against best practice.

To pursue these priorities, the congress established a strategic committee that included a Federal Government representative. The congress also asked the Australian Local Government Association to seek a Federal commitment to a comprehensive review of the Roads to Recovery programme during the next four years. The Federal Government has agreed to review the programme in conjunction with the Australian Local Government Association before the programme finishes in 2005. The Federal Government has also agreed that the Bureau of Transport Economics will examine how much State and Territory governments spend on local roads to complement its research into local government expenditure on local roads.

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Technical tools to help councils fund and manage their local road system

Council have at their disposal a number of technical tools to help them fund and manage their local road system. These tools include the Australian Road Research Board's local roads manuals and the Institute of Public Works Engineering Australia's Infrastructure Management Manual. As well, the Local Government Ministers' Conference is funding a manual on local government infrastructure financing.

Australian Road Research Board local roads manuals

The Australian Road Research Board has released two manuals to help councils optimise their local road maintenance practices. The Unsealed Roads Manual was released in 1993 and the Sealed Local Roads Manual was released in 1995. With Federal funding, the Board released the revised Unsealed Roads Manual in August 2000. The manual introduces new techniques to maintain local roads so they can cope with more traffic, heavier loads and heightened community expectations about road smoothness. The manual states that Australia spends about $1,000 million per year constructing and maintaining unsealed local roads. It suggests that adopting best practice can yield major savings in constructing and maintaining these roads.

International Infrastructure Management Manual

The Institute of Public Works Engineering Australia has prepared an Infrastructure Management Manual that explains life cycle asset management, introduces a variety of techniques to improve asset management, provides best practice examples and explains the regulatory requirements for asset management in Australia. Copies are available from the Institute.

Infrastructure Financing Manual

The Local Government Ministers' Conference Activities Fund is funding preparation of a manual on local government infrastructure financing. The manual will facilitate:

• identification and classification of different types of local government infrastructure;
• identification of barriers to local government infrastructure financing particularly for rural and remote councils;
• identification of financing options available to local government to fund their infrastructure requirements;
• determination of local government information requirements to assess the different financing mechanisms and to implement a chosen mechanism; and
• identification of relevant case studies of infrastructure financing by local government and other relevant public sector organisations.

The manual will be made available to every local government in Australia.

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Local government innovations that save money on road maintenance

A number of council have found innovative solutions to save money on road maintenance. They include the Brimbank City Council, the Cardinia Shire Council, the Richmond Valley Council and the Bellingen Shire Council.

Brimbank City Council extends road life

Brimbank City Council in Victoria has found a way to extend the life of roads by between six and 10 years. It does so by spraying a thin layer of bitumen onto a prepared road surface and covering it with a layer of small stones that become embedded in the surface by traffic over a period of one to two weeks. The council has won an International Excellence Award for the new road maintenance system. For more information contact Len Conway on (03) 9249 4248.

Cardinia Shire Council replaces gravel roads with cheap temporary seal

Cardinia Shire Council on Melbourne's urban fringe has over 1,000 kilometres of unsealed local roads. The council is using a low-cost temporary pavement or 'black re-sheet' to seal local roads and reduce costly gravel road grading and dust suppression. The council indicates that the seal, made with in situ material and with binders, lasts for seven to eight years under medium traffic volumes. For more details, contact Michael Ellis, General Manager, Asset Services, Cardinia Shire Council, on (03) 5945 4222.

Richmond Valley Council's Doolan Deck modular bridging system

Richmond Valley Shire Council manufactures a modular concrete deck bridge construction system, which cuts material and labour costs. The system, which was originally developed as a maintenance strategy for timber bridges, won the 1996 National Awards for Innovation in Local Government engineering award.

Richmond Valley Council believes the Doolan Deck's durable semi-rigid connection system for prefabricated units would suit many councils that need to replace numbers of small bridges. They offer design and construction consultancy services based on their direct experience as well as training of client council staff. For more details, contact the council's principal engineer, Bill McMahon on (02) 6660 0300.

Bellingen Shire Council's bridge deck gantry

Winner of the 1999 national rural Award in the National Awards for Innovation in Local Government, this gantry can help lift into place bridge deck units that weigh up to 28 tonnes with spans of up to 12 metres, widths of up to 3.6 metres and skew angles of up to 20 degrees. It is ideal for bridgework in constricted, environmentally sensitive sites and is compatible with modular deck construction. For more details contact Warwick Knight, Project Manager, on (02) 6655 7300.

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Other infrastructure issues

Local roads are not the only infrastructure for which councils are responsible, although this is a responsibility for which they have significant legal liability (see the report on a recent High Court decision below). Stormwater and waste management, as well as water supply and salinity, are major issues for many councils and this section discusses some of the implications for councils of deteriorating distribution systems and the impact of environmental factors.

High Court decision on non-feasance

On 31 May 2001, the High Court delivered judgement in two cases on appeal from the Supreme Court of New South Wales: Brodie v. Singleton Shire Council [2001] HCA 29 and Ghantous v. Hawkesbury City Council (2001) 180 ALR 145. The cases were heard together as they were about the liability of Australian road authorities for negligence in accidents allegedly arising from road (Brodie) and footpath (Ghantous) surfaces under their control. Both cases considered the 'highway rule' that protected road authorities from liability in negligence cases where it has simply allowed roads and footpaths to deteriorate (non-feasance). Gleeson CJ explained that:

The essence of the rule is that a highway authority may owe to an individual road user a duty of care, breach of which will give rise to liability in damages, when it exercises its powers, but it cannot be made so liable in respect of mere failure to act. (para 14)

In Brodie, a 22-tonne truck, delivering concrete to a construction site, crossed a 50-year-old bridge. The truck was damaged and its driver injured when the bridge partially collapsed. The council had done work on the bridge's planks, but not on the decaying wooden girders. The Court of Appeal found the cause of the accident was the wooden girders collapsing and the council was protected by the doctrine of non-feasance. On appeal, the majority of the High Court abolished the defence of non-feasance. Councils have since expressed concern they will face increased litigation and insurance costs. The Australian Transport Council is to consider the issue. The Institute of Public Works and Engineering Australia estimates that there are about 20,000 timber bridges in Australia.

Local governments' water, sewerage and waste management infrastructure

Local government is responsible for water supply in Queensland, Tasmania and regional New South Wales. Elsewhere this is a responsibility of the State or of regional utilities. Local governments are responsible for management of solid waste in every State.

Value of environmental assets

According to the Institution of Engineers' Australia Report Card, 98 per cent of Australia's population is provided with reticulated water and the quality and reliability of supply is high. The Report Card puts the total value of potable water assets in Australia at $36 billion. The value of assets in States where local government provides or contributes to water supply is put at $5.1 billion in Queensland, $14 billion in New South Wales and the Australian Capital Territory and $550 million in Tasmania. The written down value of water assets as a percentage of their replacement value in Queensland is 89 per cent, in New South Wales and the Australian Capital Territory it is 69 per cent but in Tasmania it is 46 per cent.

The Report Card also shows the estimated replacement value of Australia's waste-water assets is $37.6 billion, with $5.1 billion of this in Queensland, $1.2 billion in Tasmania and $15.5 billion in New South Wales and the Australian Capital Territory. The written down value of waste-water assets as a percentage of their replacement value in Queensland is 89 per cent, in New South Wales and the Australian Capital Territory it is 70 per cent and Tasmanian figures are not available. These written down values are not comprehensive as data was not available for major non-urban utilities.

According to the Report Card, less than 10 per cent of waste-water generated in Australia's cities and towns is being reused. Some leaders in the field of waste-water recycling include the City of Playford and the City of Onkaparinga in South Australia; Latrobe Council and Brighton Council in Tasmania; the City of Hervey Bay and the City of Redcliffe in Queensland and Coffs Harbour City Council and Albury City Council in New South Wales. Albury City Council's state-of-the-art $30 million wastewater recycling scheme was the overall winner at the annual Institute of Public Works Engineering Australia - New South Wales Division Awards.

Local Government Focus reported, in its October 2001 edition, that public-private partnerships are being established in solid waste management. For example, Port Stephens Council's waste composting plant is successfully treating 100 tonnes per day of solid waste, sewage sludge and other organic material, enabling the council to close its four land-fills. Other plants are being established in Western Australia by the Southern Metropolitan Regional Council and in Queensland by the Cairns City Council, Douglas and Mareeba Shires.

Environmental revenue and expenditure

The Australian Bureau of Statistics has released data on the revenue and expenditure of local governments' water and waste management infrastructure. The data shows that in 1999-2000, Australian local governments received nearly $2.3 billion for environment protection activities and about $1.3 billion for natural resource management. They spent $1.9 billion in current expenses and $607 million in capital expenditure on environment protection (mainly solid waste and waste water management). They spent a further $1.4 billion in current expenses and $453 million in capital expenditure on natural resource management activities (mainly water supply and land management).

Rates provided 86 per cent of the revenue for environmental protection and 80 per cent of the revenue for natural resource management. Government subsidies and grants for these activities contributed under 6 per cent of the revenue ($128 million for environment protection and $75 million for natural resource management). (Australian Bureau of Statistics Catalogue No 4611.0)

The Institution of Engineers' Report Card indicates that, of the Australian population, 2 per cent do not have access to reticulated water. In 1994, the Human Rights and Equal Opportunities Commission found in its inquiry Time Running Out that 154,000 Australians living in 1,200 communities did not have a reticulated water supply. The lack of an adequate water supply also constrains regional development. Time Running Out reports that Coominya, a township west of Brisbane, where there is no piped or treated water supply, was unable to expand the local abattoir because it could not guarantee a water supply. An example of one remote township which is working towards maintaining an acceptable supply of fresh water is Tibooburra (see box).

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Salinity

Salinity has three major impacts on local government. Firstly, it damages local government infrastructure. Secondly, it diminishes local government's rate base through reductions in property values. Thirdly, local governments in affected areas need to contribute to catchment/regional plans to minimise the effects of salinity.

The impacts of salinity on infrastructure include damage to buildings, roads, underground pipes and cables, gardens and sports fields, failure of septic tanks and salination of local water supplies.

Victoria's Infrastructure Planning Council Interim Report estimated that, in Victoria, some 140,000 hectares of irrigated land and 120,000 hectares of dryland are currently affected by salinity. It puts the direct cost of salinity at $50 million a year rising to $155 million a year by 2050.

The National Land and Water Resources Audit showed that 5.7 million hectares of land were at risk from salinity and it predicted that could triple to 17.1 million hectares within 50 years. The President of the Australian Local Government Association states in Local Government Focus (8 August 2001) that 20,000 kilometres of roads are at risk from salinity.

Policy responses to salinity

In 1994, the Council of Australian Governments agreed to reforms to achieve efficient and sustainable water use by 2005. These include:

• provisions for water entitlements;
• water pricing and ecologically sustainable water trading;
• allocation of water for the environment;
• protection of groundwater;
• institutional reform;
• public consultation; and
• education and research.

Under National Competition Policy, all governments must ensure that water prices reflect the cost of providing water. They must also review water pricing methods to see if it is cost effective to introduce two-part tariffs. This involves introducing a fixed service charge and a variable charge based on water use, thereby encouraging water conservation.

The Commonwealth, State and Territory Governments recently agreed to a seven-year National Action Plan on Salinity and Water Quality. It involves $700 million funding from the Federal Government, which is to be matched by the States and Territories. The agreement provides for catchment/regional bodies in 21 priority regions to develop an integrated catchment/regional natural resource management plan. The plan will aim to prevent, stabilise and reverse trends in dryland salinity, affecting sustainability of production, biological diversity, infrastructure, water quality, and security of allocations for human uses, industry and the environment.

Finally, the Federal Government has provided about $1 billion under the Natural Heritage Trust for improvement and management of Australia's biodiversity, land, water and marine resources. The Federal Government recently announced a further $1 billion to extend the Natural Heritage Trust for a further five years, commencing in 2002-03.

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The way forward

This chapter has identified some of the key issues affecting local governments' management of its economic infrastructure. Following the intervention of the Roads to Recovery programme, local government is currently spending about $3 billion per year on local roads. Some States and some councils are meeting their road maintenance needs through increased State contributions, by giving higher priority to asset preservation and by rapid adoption of new technologies. The approach taken in Western Australia is one example of a way forward. The strategy agreed at the Mildura Rural Roads Congress is consistent with the Western Australian approach. There are many other potential solutions. The 1999-2000 National Report highlighted better policing of overloading on local roads, letting of more long-term local road maintenance contracts, and lifting borrowing and revenue as additional options (pp.71-72).

The data currently available suggest that environmental protection and natural resource management are major activities for local government. The written down value of water and waste-water assets in Queensland and New South Wales suggests these assets are broadly sustainable. However, the data does not enable any conclusions to be drawn about the adequacy of assets in smaller regional communities. The Australian Local Government Association plans to extend data collection on state local government infrastructure beyond Victoria and South Australia to all States. That data will help make analysis of environmental and natural resource management assets more comprehensive and reliable.

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