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Local Government Infrastructure

Infrastructure comprises the assets needed to provide people with access to economic and social facilities and services. In general, infrastructure facilities are fixed in place, are expensive and time consuming to plan and build, are durable and have low operating costs, and are often networks. They require routine maintenance and periodic replacement of components to compensate for wear and tear and to prolong the asset's life. They often have environmental and social benefits that cannot be fully recovered by user charges.

Local government infrastructure responsibilities

Local government plans, develops and maintains key infrastructure for its communities. It provides and maintains infrastructure such as local roads, bridges, footpaths, regional aerodromes, water and sewerage (in Queensland, regional New South Wales and Tasmania), stormwater drainage, waste disposal and public buildings, parks and recreational facilities. It also has planning responsibilities that affect provision of infrastructure, whether by government or by business. These responsibilities include town planning, rezoning of land, subdivision approval, development assessment and building regulation.

Through traffic management, local government seeks to maximise transport benefits while minimising the safety and environmental impacts of transportation. 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 key contribution to human capital infrastructure.

Local roads

Local roads provide basic access from farms, factories and homes to schools, hospitals, work, shopping and to families and friends. Local roads are part of a network. They are vital feeder roads to the economically significant arterials and highways funded by Australian and State governments, so they are important to overall transport efficiency and to national economic performance.

Previous National Reports provided basic data on the extent and value of our local roads and the gap between local road needs and expenditure on local roads. These issues are covered again briefly, but this chapter outlines a possible strategy for local government to maintain local roads in a fit-for-purpose condition. It also includes data on State government contributions towards local road funding and on the efforts of State Local Government Associations to improve councillor awareness of their local road management responsibilities.

Extent of council managed local road network

Australia has about 810 000 kilometres of public roads: 650 000 kilometres (80%) of these are local roads for which local government is responsible. About one-third of this network is sealed and two-thirds is unsealed (unformed, formed or gravel roads). Despite vast differences in population and area, the length of sealed roads per 1000 people is remarkably consistent between States and Territories, averaging about 11 kilometres per 1000 people.

Table 4.1 provides comparative data on local roads showing, for each State, the length of sealed and unsealed roads. The data are open to a variety of interpretations. Does, for example, the fact that almost 80 per cent of the local road length in South Australia is unsealed mean it has a lower level of service compared with other States (and hence a higher need)? Or are councils, despite farm consolidation and changes in settlement patterns, maintaining a more extensive unsealed local road network than they really need to?

Table 4.1 Local road statistics, based on council data, at June 2004

State

Total
local road
lengths
(kms)

Total
sealed
local road
lengths
(kms)

Total
unsealed
local road
length
(kms)

Sealed
(%)

Share of
local
government
area (%)

Population
(million)

Length
of sealed
roads
per 1000
people
(kms)

Length of
unsealed
road per
1000
people
(kms)

NSW

143 635

61 216

82 419

42.6

12.9

6.730

9.10

12.25

Vic.

128 777

53 339

75 438

41.4

4.1

4.917

10.85

15.34

Qld

148 744

41 247

73 729

27.7a

31.9

3.795

10.87a

19.43a

WA

122 163

33 076

89 087

27.1

45.3

1.952

16.94

45.63

SA

74 995

16 194

58 801

21.6

2.8

1.527

10.60

38.50

Tas.

14 220

6 937

7 283

48.8

1.3

0.490

14.15

14.86

NT

14 014

2 014

12 00

14.4

1.7

0.198

10.15

60.47

ACT

3 598

3 378

220

93.9

<0.1

0.323

11.13

0.02

Total

650 146

217 401 a

398 977

33.4a

100

19.932

10.91a

20.02a

Note: a Totals and averages are approximate because Queensland data for sealed and unsealed local road length is only for 74 per cent of mainstream councils (Queensland data is also from 2003).
Source: State Local Government Grants Commissions - unpublished data. ACT population is at December 2003 (Australian Bureau of Statistics personal advice).

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Local road funding by each sphere of government

Under the Australian Government's land transport plan, AusLink, the Australian Government, and the States and Territories share responsibility for a defined national network of transport corridors, strategic links to ports and airports and rail-road inter-modal connections. The States are also responsible for the remaining arterial road network and for most local roads in unincorporated areas. Local governments manage local roads within their council area. The Australian Government, State and Territory and local governments all contribute towards council local road funding.

Last year's National Report showed that local government's local roads are worth about $75 billion and that local government has an annual local road deficit of about $644 million per annum (or $344 million after the $300 million per annum Roads to Recovery funds are included). This remains the best estimate available.

We estimate that, in 2002-03, local government spent $3805 million on local roads (see Table 4.2), but (using the deficit of $344 million) it needed to spend $4149 million per annum to maintain local roads in a fit-for-purpose condition. About one-third of local road spending is on new capital works and about two-thirds is on road renewal.

Table 4.2 Total spending on council local roads, 1998-99 to 2002-03

1998-99
($m)

1999-2000
($m)

2000-01
($m)

2001-02
($m)

2002-03 a
($m)

Total local road expenditure

3194

3525

3562

3714

3805

Increase over previous period (%)

n/a

10.4

1.0

4.3

2.2

Note: a DOTARS estimate. Australian Bureau of Statistics expenditure on transport and communications for 2002-03 was $4751 million up by 2.2 per cent from $4637 million in 2001-02 (Australian Bureau of Statistics, Government Finance Statistics, cat. no. 5512.0 Table 32). Because local road expenditure makes up about 80 per cent of the published 'transport and communication' expenditure, DOTARS has assumed that local road expenditure also rose at a similar rate.
Source: National Road Transport Commission Annual Report 2002-03 p. 32 using Australian Bureau of Statistics, Government Finance Statistics, data from cat. no. 5512.0.

Of the estimated $3805 million spent in 2002-03 on council-managed local roads, the Australian Government contributed $672 million (see Table 4.3) and State governments contributed about $278 million. From this we can estimate that local government spent about $2855 million of its own-source revenue on local roads in 2002-03. This is up by 40 per cent since 1997 when the Bureau of Transport and Regional Economics estimated that council own-source spending on local roads was $2034 million. This suggests that councils have significantly increased their own-source spending on local roads and Roads to Recovery funds have not substituted for council own- source spending, but indeed may have accelerated councils' work to maintain local roads.

Table 4.3 Australian Government funding for local roads, 2000-01 to 2004-05

2000-01
($m)

2001-02
($m)

2002-03
($m)

2003-04
($m)

2004-05
($m)

Local road FAGS

408

429

447

461

480a

Roads to Recovery
150
300
200
300
250
Black Spot - local roads
20
17
25
17
n/a

Total

578

746

672

778

>730

Notes: a This estimate includes an extra $4.25 million for South Australian local roads.
FAGS - Financial Assistance Grants.
Source: Department of Transport and Regional Services.

Most of the $278 million in State Government funding in 2002-03 came from Queensland's Transport and Infrastructure Development Scheme and Western Australia's State Road Funds to Local Government Agreement.

In 2004 the National Local Roads Congress passed a resolution that urged 'State and Territory governments to transparently and comprehensively collect and report on their [local] road expenditures; and ... local government associations to collaborate with State Grants Commissions to develop and collect consistent and comparable data on local roads expenditure at all levels.'

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Australian Government funding for local roads

In 2003-04, the Australian Government contributed about $780 million towards local roads through programs such as the Local Government Financial Assistance Grants, the Roads to Recovery program and Black Spot funding. Total Australian Government local road funding has grown from $578 million in 2000-01 to $778 million in 2003-04 (see Table 4.3 and Figure 4.1).

Figure 4.1 Australian Government local road funding

Figure 4.1 Australian Government local road funding

Source: Department of Transport and Regional Services.

Renewal of Roads to Recovery program

Over the period 2000-01 to 2004-05 the Roads to Recovery program will provide a $1200 million boost to normal local road funding.

In February 2003, the Department of Transport and Regional Services and the Australian Local Government Association released their joint review of the Roads to Recovery program as part of consideration of its possible continuation beyond June 2005. The key finding of the review was that Roads to Recovery funds have generally been well used in ways consistent with the intention of the program, namely to address the backlog of maintenance and renewal on local roads.

During the 2004 election, the Australian Government pledged to extend the Roads to Recovery program for a further four years to 2008-09 at a cost of $1350 million: $1200 million of this ($300 million a year) will be provided by direct formula allocation to local government over 2005-06 to 2008-09.

The remaining $150 million, to be provided over the period 2004-05 to 2008-09, includes $120 million that will be allocated for land transport infrastructure projects of strategic regional importance and $30 million that will be distributed on a formula basis to the States and Territories for roads in unincorporated areas (see Table 4.4).

Table 4.4 Renewed Roads to Recovery program, planned expenditure, 2004-05 to 2008-09

200405
($m)
200506
($m)
200607
($m)
200708
($m)
200809
($m)
Council grants based on formula
0
300
300
300
300
Strategic component and State and
Territory unincorporated areas
30
30
30
30
30

The Roads to Recovery program will become a component of the Australian Government's national land transport infrastructure plan called AusLink from July 2005. The Australian Government has committed $12.5 billion to AusLink from 2004-05 to 2008-09 to implement the first five-year plan. The objectives of AusLink include improving logistics, boosting trade, enhancing health, safety and security and sustaining the environment. AusLink also aims to promote regional economic growth, development and connectivity. The AusLink White Paper at www.dotars.gov.au/ has further details of the plan.

Australian Government additional funds for local roads in South Australia

The Australian Government will provide an additional $26.25 million over three years to address South Australia's current disadvantage in local road funding. The decision more closely aligns the State's share in Local Government Financial Assistance Grants to its 8.3 per cent share under the Roads to Recovery program. The decision is an interim response to the findings of the Hawker Inquiry into local government finances by the House of Representatives Standing Committee on Economics, Finance and Public Administration (Rates and Taxes: A Fair Share for Responsible Local Government, October 2003). The Committee acknowledged 'the disadvantages to South Australian councils under the local roads component of Financial Assistance Grants'. Eighty-five per cent of the funds will be distributed to councils on a formula basis and 15 per cent as Special Local Roads Grants. The first payment for 2004-05 was made in August 2004 and the second payment in November 2004.

Table 4.5 Australian Government additional grants for South Australian local roads expenditure, 2004-05 to 2006-07

200405
($m)
200506
($m)
200607
($m)
South Australian local roads
4.25
9.0
13.0

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A strategy to maintain our local roads in good condition

The deterioration of local government assets, including local roads, is occurring in all States in Australia and needs to be addressed. But the deterioration of local roads is not unique to Australia. It is also occurring in Canada, the United Kingdom and the United States (see 'Australia is not alone in facing shortages of funds for road maintenance').

Australia is not alone in facing shortages of funds for road maintenance

United States

According to the American Society of Civil Engineers' 2003 Progress Report for America's Infrastructure, America's roads and bridges are graded D+ and deteriorating. The United States Government's own reports corroborate the need to spend more on roads to maintain them in their existing condition. Chapter 7 of the United States Federal Highways Administration's Status of the Nation's Highways, Bridges, and Transit: 2002 Conditions and Performance Report estimates average annual outlays by all spheres of government over 2001-20 would have to increase by 17.5 per cent to reach their projected US$75.9 billion annual 'cost to maintain' level. The 'cost to maintain' level is the amount needed to maintain the conditions and performance of the highway system at a level sufficient to keep average highway user costs from rising above their 2000 levels.1

The American Association of State Highway and Transportation Officials' Bottom Line Report has an even bolder estimate. It estimates that capital outlays by all spheres of government would have to increase by 42 per cent to reach the projected US$92 billion 'cost to maintain' level.2

According to the American Association of State Highway and Transportation Officials however, the 2005 budget proposal, released by the United States administration proposed that highway expenditure be frozen at US$33.6 billion annually through 2009 to reduce the budget deficit.3 About US$600 million a year of this money is transferred to local government for spending on roads.4

The pressure to cut spending to balance budgets is also being felt at the local level. The City Manager, City of Santa Cruz commenting on the budget crisis in the General Fund after the City cut over US$7 million from its General Fund said:

The proposed budget includes $750 000 for street reconstruction and overlay, an amount that is woefully insufficient by any standard. In 1999, it would have cost $25 million to bring all the City's streets into good condition, and $2 million per year to keep them there. To do the same in 2003 would have cost $44 million, plus $2 million per year. As the City's streets continue to deteriorate, the cost of returning them to good condition will continue to escalate sharply, because it is so much more expensive to rebuild a street that is in poor condition than to maintain a street that is in good condition ... The only practical answer ... is the adoption of a bond measure that would provide a huge infusion of funds to pay for extensive maintenance projects. The City could do this on its own, or as part of a larger regional transportation bond.5

Canada

The Federation of Canadian Municipalities (FCM) says Canada has a national municipal infrastructure deficit of C$60 billion that is growing at the rate of C$2 billion a year.6

According to the FCM, Canadian municipalities spend about C$12-$15 billion a year on infrastructure. Almost 60 per cent of the C$1.6 trillion network of roads, bridges, sewers and water mains - and other components - is more than 50 years old. Some 30 per cent is more than 80 years old and nearing the end of its service life.

On 15 November 2004, the Governments of Canada and Ontario signed an agreement to each provide up to C$298 million over the next five years to improve public infrastructure in small urban and rural municipalities. Participating communities must contribute one-third of the cost of any project, bringing the investment to C$900 million.

The Government of Canada plans to conclude similar agreements with each province and territory under its C$1 billion Municipal Rural Infrastructure Fund. A similar agreement was concluded with the Province of Manitoba on 3 December 2004. Up to 1 per cent of the Municipal Rural Infrastructure Fund will be available to help municipalities improve their asset management.

The Government of Canada news release said:

The investments will help communities improve water and sewage treatment and waste management, fix local roads and repair bridges, as well as help address other health and safety priorities. Other funding categories include: public transit, municipal energy improvement, cultural, recreational and tourism infrastructure, and connectivity.

The Municipal Rural Infrastructure Fund builds on the success and lessons learned from previous programs, especially the $2.05 billion Infrastructure Canada Program and complements programs such as the $4 billion Canada Strategic Infrastructure Fund, which addresses larger infrastructure needs, primarily in urban areas.7

United Kingdom

The United Kingdom Parliamentary Committee on Transport considered the non-trunk road network to be in a much worse condition than it was in 1980, more than 20 years ago.8

The Committee suggested that,

As a first step to prioritising local road maintenance, we recommend that the Department publish an annual comparison of the planned and actual expenditure on road maintenance along with details of road quality for each local authority. People need better information about the performance of their local authorities.9

The Committee observed that,

The true extent of the maintenance backlog for roads is unclear. The Department for Transport estimated the backlog to be £3.75 billion in 2000. A survey of 30 per cent of local authorities conducted by the Institution of Civil Engineers estimated the backlog of road and bridge maintenance to be £5.5 billion. A survey of almost half of all local authorities by the Asphalt Industry Alliance found that there had been a shortfall of £1.1 billion per year in road maintenance across Britain.10

We are now in a situation where one-third of budgets are being spent on reactive, patch and mend maintenance and tens of millions of pounds spent on insurance premiums and pay outs to injured third parties. Some local authorities appear to have little grip on the situation with 75 per cent of highways services classed as fair or poor. The slow but steady squeeze on resources for local maintenance over the last decade has taken a heavy toll ... only one-quarter of local authorities are able to provide good or excellent highway services. The results too often are a lack of information about the scale of the problems, a significant skill shortage and badly managed systems. A local commitment to funding and prioritising highway services and good public information are an essential part of this.11

The Transport Committee said:

We welcome the significant increase in funding for local road maintenance provided by the Department since 2001 ... evidence to date suggests that the rise in the maintenance backlog of road surfaces may have been halted. It is far less obvious that the Government is on-track to meet its target to eliminate the backlog of local road maintenance by 2010. The local road network is still in a much worse state than throughout the 1970s and 1980s and the true extent of the backlog is not yet known. Even the extra money provided has not made up the hole in expenditure between 1994 and 2001, nor has it allowed for recent increases in the costs of construction. In addition, there are almost 25 per cent (5 million) more vehicles on the roads today than in 1991.12

Responding to these criticisms, the Department of Transport in its 10 Year Plan for Transport set out 'to eliminate the road maintenance backlog by 2010'. It acknowledged that 'local road maintenance has suffered from years of neglect' and that it 'needed to get a better estimate of the existing backlog and a better understanding of how much money will be needed to clear the backlog over the remaining life of the 10 Year Plan.' The Department was undertaking a National Road Maintenance Condition survey to estimate the cost of the outstanding maintenance work. The Department also required councils to produce five-year transport plans.13

1 See www.fhwa.dot.gov/policy/2002cpr/ch7.htm.
2 See American Infrastructure Report Card at www.asce.org/reportcard/index.cfm?reaction=full&page=6#roads.
3 See American Association of State Highway and Transportation Officials, media release, 3 February 2004.
4 Federal Highways Administration Innovative Finance Performance Review p. 2 at www.fhwa.dot.gov/innovativefinance/perfreview/sect1.htm.
5 Wilson 2004, City Manager, City of Santa Cruz, California USA, p. 4. For an even bleaker update, that begins 'The City is winding up a bad year, from a financial point of view, and preparing to begin a worse one . '.' see www.ci.santa-cruz.ca.us/fn/0304bud/05%20Budget%20Message.pdf.
6 Source www.fcm.ca/ at 9 September 2004.
7 Source: www.infrastructure.gc.ca/ at 8 December 2004.
8 Local Roads and Pathways Fifth Report of Session 2002-03 Volume 1, p. 16, at www.publications.parliament.uk/pa/ cm200203/cmselect/cmtran/407/40702.htm 25 June 2003.
9 ibid. p. 9.
10 ibid. p. 14
11 ibid. p. 16
12 ibid. p. 16
13 The government's response to the transport committee's report on local roads and pathways, October 2003 pp. 2-3 at www.communities.gov.uk/corporate/publications/all/.

New Zealand has taken steps to arrest the deterioration of its local roads. New Zealand's Local Government Amendment Act (No. 3) of 1996 required councils to fund asset depreciation (defined as loss of service potential) from operating revenue and required all councils to develop detailed asset management plans for councils' assets (Rosson 2000, p. 10). Council asset management plans are audited, and improvement plans are developed and published. New Zealand's approach is attractive, but implementing it in Australia would not be straightforward. Australia has a much greater road length and a more dispersed population. Many councils in rural and remote parts of Australia are undergoing depopulation and they may not have the financial capacity to fully fund asset depreciation. Queensland's Local Government Act comes closest to matching New Zealand's approach. It requires that 'local government must have systems in place to ensure [that] ... assets are protected from loss' (see the Queensland section below).

In Australia, local road expenditure typically accounts for about 20 to 25 per cent of council budgets. The apparent gap of about $344 million (after Roads to Recovery funding) between what local governments spend and what they need to spend on local roads to maintain them in a fit-for-purpose condition is about 8 per cent of the $3805 million spent annually on local roads (or about 2 per cent of the $19 billion in total local government spending). This gap could be bridged in many ways - for instance, by improving council productivity, by extra spending, or by redirecting road capital expenditure to road maintenance. Some key elements of a possible national local roads strategy are outlined below (see 'A possible national local government roads strategy').

A possible national local government roads strategy

Local government could set itself a national goal to manage its local road in a fit-for-purpose condition by 2008-09, erasing the $344 million local road deficit. This would improve resident satisfaction, improve access to schools, hospitals, workplaces and shops, benefit local businesses and reduce public liability claims. Some steps that could be considered are:

  • Australian and State governments and Local Government Associations could:
    • set targets for achieving the goal and put in place ways of measuring achievements
    • make more explicit councillors' responsibility for managing local government's assets
    • fund ongoing research into better local government asset management
    • maintain high levels of communication and cooperation between all stakeholders with an interest in maintaining a good local road network
    • encourage debate on ways for councils to better meet the costs of infrastructure (for example, examine whether urban councils in Australia could implement New Zealand's approach of requiring councils to fully fund operating expenditure, including depreciation, from operating revenue or consider the wider application of the new approach to road management adopted in Victoria).
  • Councils could:
    • improve awareness of asset management issues amongst residents
    • establish local road service standards by consulting with local communities and businesses
    • implement measures to maximise revenue from road related infrastructure (such as car parks) and to reduce demand on the local road system (see 'New study to help councils maximise parking revenues')
    • give maintenance expenditure priority over new capital expenditure
    • find efficiency savings in local road construction and maintenance.

Once the goal of sustainability has been achieved, councils could set a more ambitious goal of significantly improving the local road network to optimise transport outcomes.

Local government is currently collecting some of the data that would be needed to support a national approach. The Australian Local Government Association, together with each State Local Government Association, is currently developing a national framework for local government road asset management data collection that will cover issues such as local road condition, expenditure, maintenance levels and maintenance costs. It also plans to make better use of the data held by Local Government Grants Commissions on local road funding and expenditure. Some States are making good progress on councillor education and Victoria's Road Management Act 2004 is improving the way councils manage local roads (see the section on Victoria below).

New study to help councils maximise parking revenues

Step eight of the possible national local roads strategy refers to the need to maximise revenues from road related infrastructure, one of which is car parks. The Australian Road Research Board is currently doing a five-year study to help councils maximise parking revenues by allowing councils to compare best practice parking operations (for example, automated payment collection) with other councils (Institute of Public Works Engineering 2004, p. 23).

State developments in road funding and asset management

New South Wales

Under s. 163 of the Roads Act 1993 all New South Wales councils must have a local road asset register. Local governing bodies must consult with their communities on local road service standards before determining the level of rates through the draft management plan (s. 402 Local Government Act 1993). Rate pegging restricts their capacity to raise rates, so that in 2002-03 average rates per capita in New South Wales of $351 were about $19 (5%) below the Australian average of $370 per capita. Any council wishing to increase its general income above a prescribed limit must apply for a special variation. If the council demonstrates community support for its proposal, approval is usually granted.

In 2002-03, council local road assets were valued at $31.9 billion at current cost and $19.7 billion in the written down value or 62 per cent of the current cost, suggesting 38 per cent of the assets have been consumed. In 2002-03, New South Wales councils spent $684 million on maintenance of all types of infrastructure but they needed to spend about 25 per cent more than that ($912 million) to maintain them in a sound condition. Forty- eight councils were spending sufficient money to maintain their assets while 124 councils were not. Seventeen councils needed to spend more than $100 million to restore their assets to a satisfactory condition.14

In 2004-05, the New South Wales budget provided $136.6 million to councils to help them manage their roads (see Table 4.6). Most of the funds are grants 'to assist Councils to manage their secondary arterial road network' and most will be spent on regional roads, where there is a blurring of responsibility between State and local governments. Regional roads are council owned and managed, but because of their regional significance they qualify for State Government assistance. They are broadly equivalent to roads that in other States are called 'roads of regional significance'.

Table 4.6 New South Wales - State government funding for council-managed local roads, 2002-03 to 2004-05

2002-03
($m)

2003-04
($m)

2004-05
($m)

Block grant for local government

108.3

111.2

113.7

Repair program grant for local government
21.6
22.4
22.9

Total - council local roads

129.9

133.6

136.6

The State Government funding has two components: $113.7 million is a block grant which is allocated on a formula basis according to road length, traffic and the cost of traffic facilities and the remaining $22.9 million is Repair Program Grants, which councils match dollar-for-dollar, for high priority works determined on merit by regionally-based consultative committees of councils.

The start of the State government's Regional Roads Timber Bridge Program has been deferred until July 2007. The program aimed to provide $105 million to help councils upgrade 369 timber bridges on their regional roads.

The State government has established a New South Wales Road Classification Review panel to review the classification of State and regional roads to take account of demographic, economic or other changes that may affect the relative importance of these roads. The aim is to identify which roads qualify for State funding. The review is to be cost neutral for the State government. The review should help clarify what is a local road, regional road and state road.

The Institute of Public Works Engineering Australia has re-established its National Asset Management Committee and has established a web site to encourage networking between councils. The Institute of Public Works Engineering Australia of New South Wales has a Standing Committee on Roads and Transport and has established a Roads and Transport Directorate with a regional network of 13 regional road groups covering 153 councils. The Committee is working with the Roads and Traffic Authority and the Motor Accidents Authority to improve standards for measuring and reporting on the condition of local government assets. The Directorate aims to help members improve their asset management roles, compare their performance with other councils and seek greater financial support for local roads and transport.

14 NSW Department of Local Government, 'Structural Reform of Local Government in NSW', at www.dlg.nsw.gov.au/dlg/dlghome/dlg_home.asp 15 September 2004.

Victoria

The Road Management Act 2004 regulates road management responsibilities in Victoria. It requires councils, from 1 July 2004, to keep a register of roads for which they are responsible, to develop asset management plans for those roads and to maintain them according to the standards councils set. The Act has transferred the responsibility for 11 000 kilometres of main roads from local government to the state road authority, providing greater clarity in roles and responsibilities. Until recently, these arterial or main roads were owned by the State government and managed, by agreement, by the local council.

Victoria's Auditor-General audited the management of roads of nine councils in 2002 and was critical of their performance. In the follow-up audit in 2004, the Auditor-General found that:

all nine councils examined had started improving their road management practices [and that] although not all recommendations were fully implemented by all councils, progress to date is satisfactory. Legislative changes, and a major council asset management initiative, will assist councils to continue to improve their road management practices.15

The Victorian Government provides grants to a number of rural councils to help them develop asset management plans. It has also provided one-on-one support to a number of pilot councils to establish sound asset management planning, and organised a workshop for councillors on strategic asset management. The need for an ongoing training program is being investigated.

In December 2003, the Victorian Government released asset management guidelines for local government called Sustaining Local Assets. Local Government Victoria's Asset Management Performance Measures Project will help councils to measure their own asset management performance, to benchmark their performance against like council groupings and demonstrate continuous improvement to their communities. Local Government Victoria organised training for this project during May-June 2004; and will collect aggregate data annually.

The Municipal Association of Victoria has introduced a Program called STEP to help councils improve their asset management planning and processes. It aims to help councils achieve a minimum standard of asset management process within two years. Seventy- five councils are involved in the program. Councils are assessed by independent providers and reassessed every six months to establish asset management targets to close the recurrent funding gap in assets and infrastructure renewal. According to the Municipal Association of Victoria, since 2002, local government's asset management rating has improved from an 'F' to a 'C', a substantial and sustained improvement. In response to AusLink, the Municipal Association of Victoria and Vic.Roads have established regional groups of councils to strategically manage their local road network and to seek Australian Government funding.

The Municipal Association of Victoria has established a web-based Asset Management Knowledge Base that enables councils to access knowledge on best current practice and statistics on economic life based on actual performance. It plans to produce a 'Cook Book' for practitioners to show links between management practices and life cycle results, optimum asset management methods and economic life and life cycle costs. The Knowledge Base also allows councils to record asset performance data to improve asset accounting and auditing. The Municipal Association of Victoria is also supporting the need for a 'national interoperable data framework' so project proposals can be readily assessed for their relative merits and viability.

In 2002-03, Victoria's councils spent $758 million on local roads and bridges. Of that figure, $534 million was operational expenditure and $224 million was capital outlays. Councils are not subject to rate restrictions but they must consult communities on rate increases. The Local Government Act 1989 incorporates best value principles that require service standards to be set for all services. Councils must develop, under their four-year Council Plan, a Strategic Resource Plan detailing the resources (including infrastructure assets) required to provide the services.

Victoria's data on local government infrastructure spending shows that councils are spending 81 per cent of the amount needed to replenish average annual asset consumption; and that 58 per cent of respondents to a 2003 community satisfaction survey rated council performance in providing local roads and footpaths as 'excellent, good or adequate' while 42 per cent said they 'need improvement'.

State government funding for local roads is available for specific purposes such as accident prevention and is provided through the State Impacted Local Road component of the Better Roads Victoria Program, the State Black Spot Safety Program and through funds for local road crossings over the Murray River, under the Murray River Bridges and Punts Agreement with New South Wales (see Table 4.7).

The $12 million provided for State Impacted Local Roads under the Better Roads Victoria Program is for reconstructing and upgrading local roads where the nature and volume of traffic has been or is predicted to be significantly affected by State government initiatives, such as changes in grain transport routes or the cartage of timber from crown lands. Proposals for improvements to local timber roads should reflect priorities in Timber Industry Roads Evaluation Studies (TIRES) and outcomes of TIRES regional forums.

Table 4.7 Victoria - State government funding for council-managed local roads, 2002-03 to 2004-05

2002-03
($m)

2003-04
($m)

2004-05
($m)

State impacted local road component of the Better Roads Victoria Program

10.84

12.04

12.03

State Black Spot funds for local roads

18.41

0.75

0.00

Natural Disaster funds

1.04

1.36

0.00

Direct spending on local roads/bridges

0.13

2.35

0.35

Total - council local roads/bridges

30.42

16.50

12.38

Victoria's Cardinia Shire - Design, construct and maintain

Victoria's Cardinia Shire has found a new way to improve its local roads. It has signed a 15-year partnership with Downer EDI's Works Infrastructure division to seal and maintain a 50-kilometre network of unsealed roads. Construction over two years will cost about $13 million. Downer will design, construct and maintain the roads that will be financed by the Shire. The Shire will make maintenance payments to Downer provided the network is maintained to an adequate standard. The partnership will deliver better roads sooner and achieve significant economies of scale. The Shire will pay about $3.4 million for whole-of-life costs for the roads, covering initial sealing of the roads, rural road resealing every 10 years and residential road resealing every 25 years.

Victoria's Gannawarra Shire - Making hard choices on dirt roads

In response to Victoria's Road Management Bill, Gannawarra Shire Council is considering deregistering 1200 kilometres of dirt roads (half the Shire's total road length). This would see the Council no longer carrying out maintenance on these roads and liability for use of the roads would rest with the road user. Gravel roads would only be maintained every two to three years. These measures would reduce road maintenance costs to more affordable levels.16

15 Report on Public Sector Agencies: Results of special reviews and financial statement audits for agencies with 2003 balance dates other than 30 June, Auditor-General of Victoria, May 2004 at www.audit.vic.gov.au/.
16 Deputy Mayor Cr Graeme Mann in the Koondrook and Barham Bridge News p. 3 on 24 September 2004.

Queensland

The Council is custodian of local government's assets. Queensland's Local Government Act's Finance Standards s. 33(2) states 'Local government must have systems in place to ensure (c) assets are protected from loss.'

The Queensland Government provides significant support to councils to improve their local roads management. Under its Local Roads Management and Investment Alliance, Queensland's Department of Main Roads and the Local Government Association of Queensland have agreed to build local government road management capability. The Department of Main Roads is spending $6 million over four years to develop council capability in the areas of:

  • asset management - including roads and bridges
  • road and bridge asset condition evaluation
  • road investment strategies
  • project prioritisation and investment decision making
  • roads safety risk management.

Queensland has 15 regional road groups made up of representatives from the Department of Main Roads and local government. The regional road groups make investment decisions on a group of State and local roads that the regional road groups recognises as regionally important - called local roads of regional significance. Under the alliance, local governments have agreed to collect road asset data on the local roads of regional significance network and are encouraged to collect it on their whole network. The intent is for the Local Government Association of Queensland to house State-wide local government asset data for local roads of regional significance and eventually the entire local road network.

In 2004-05, the Queensland Government will allocate $82 million in grants to local governing bodies for council-managed roads under its Transport Infrastructure Development Scheme, which is a major boost in funding (see Table 4.8). Some of this money will be spent on upgrading the local roads of regional significance. Funding for local roads of regional significance is available on a 50:50 funding basis with local councils, except for access roads for Indigenous communities where the State provides 100 per cent of the funds.

Table 4.8 Queensland - State government funding for council-managed local roads, 2002-03 to 2004-05

2002-03
($m)

2003-04
($m)

2004-05
($m)

Transport and Infrastructure Development Scheme

32.171

43.160

82.429

Western Australia

Western Australia has well-established local road planning arrangements that enable councils to identify, prioritise and fund their strategic local road network and to monitor the adequacy of their road preservation expenditure.

The responsibility of councils to preserve their assets is set out in Western Australia's Local Government Act 1995. Part 5 Division 5 Section 5.52C of the Act designates a program for replacing the local government's major assets as a 'principal activity'. The Act requires local governments to prepare an annual report containing 'a report of the principal activities commenced or continued during the financial year' and to assess 'local government's performance in relation to each principal activity'. Each local government must 'prepare a plan for the next four or more financial years' with 'the estimated cost of, and proposed means of funding, each principal activity'. Every local government maintains a road inventory using a program called ROMAN and there is a Road Forum each year to address local road issues and help councils meet their road management responsibilities.

There are no restrictions imposed by the State government on local governments raising rates to bring their roads to a fit-for-purpose condition, nor is there any requirement for local governments to consult their communities before determining rate levels.

The State Road Funds to Local Government Agreement 2000-01 to 2004-05, provides one- quarter of the State's road-related revenue (for example, vehicle registration charges) to councils for local roads, with a guaranteed minimum allocation of $90 million per year for each of the five years. In 2003-04, the Western Australian Government provided only $80 million (see Table 4.9). In 2004-05 it will provide almost $81 million. This is $11 million less than the minimum of $92 million pledged under the Agreement for 2004-05.

Table 4.9 Western Australia - State government funding for council-managed local roads, 2000-01 to 2004-05

200001
($m)
200102
($m)
200203
($m)
200304
($m)
200405
($m)
State Roads Funding Agreement
107.572
107.652
100.024
80.068
80.683

Source: Steve Hutching Main Roads WA, personal communication, 7 October 2004.

Under the current agreement, 10 regional road groups drawing membership from elected local government representatives identify, prioritise and fund key regional roads. The groups enable elected members to consider the strategic transport needs of their region rather than just the localised road needs of their council area. The groups use multi-criteria analysis, incorporating transport, social, economic, financial, road safety and environmental factors to rank road projects. They make recommendations to the State Road Funds to Local Government Advisory Committee, a body comprising representatives of Main Roads WA and the Western Australian Local Government Association that determines the distribution of State Local Road Funds. Main Roads WA with input from regional road groups has developed a 20-year plan called 'Roads 2020' for the more important local roads.

Each year the Western Australian Local Government Association compiles, from data collected from councils, its Local Government Road Assets and Expenditure Report that provides a snapshot of investment in the local road network from all spheres of government. In 2002-03, total local government expenditure on local roads was $384.3 million made up of $139.6 million on maintenance, $112.1 million on renewal of existing roads, $101.4 million on upgrading and $31.2 million on capital expansion.

The 2002-03 local road deficit of $73.1 million arose because $324.8 million needed to be spent to maintain roads in their current condition, but only $251.7 million was spent on local road maintenance and renewal.

Councils spent $112.1 million on asset renewal in 2002-03, representing about 1 per cent of the current replacement value of the State's local road infrastructure. This is only half the 2 per cent of road infrastructure that wears out each year.

The current replacement value of local roads in Western Australia was $11 960 million in 2002-03 but the written down value was $7730 million, or 65 per cent of the asset's value (see Table 4.10). According to Main Roads WA, this percentage should be about 75 per cent for a well-managed road network. To restore the asset to a sound condition would require an immediate investment of an extra $1240 million. To put this in perspective, the councils would need to spend triple the $383 million they spent on roads in 2002-03 just to restore their local roads to a sound condition.

Table 4.10 Western Australia - local government road assets and expenditure,a 1998-99, 2001-02 and 2002-03

1998-99
($m)

2001-02
($m)

2002-03
($m)

Replacement value

$9 890

$11 360

$11 960

Written down value

$6 520

$7 330

$7 730

Status quo cost (to maintain roads in current condition)

$271

$307

$324.8

Council expenditure on preservation of existing roads excluding flood damage

$204.3

$263.7

$250.5

Council expenditure on flood damage

$0.9

$7

$1.2

Council expenditure on upgrading and building new roads

$97.2

$137.4

$132.6

Note: a Does not include Main Roads allocations for major projects that are spent by Main Roads.
Source: Report on Local Government Road Assets and Expenditure 2002-03, Western Australian Local Government Association, p. 7.

On 19 November 2004, the Western Australian Government announced it would reinstate $23 A million for local road projects that were deferred over the last two years due to budget cuts. The money will be allocated to the State's 10 Regional Road Groups, who have already determined priority road projects at a local level. The State government also announced that it had agreed that under the new five-year State Road Funds to Local Government Agreement, due to come into effect on 1 July 2005, 'local government would get 25 per cent of the road user charge component of vehicle licence fees. This would see the current budget allocation to local government increase by about $22 million over the next four years and would ensure a clear revenue growth stream over the life of the agreement.' 17

17 Media Statement by the Hon. Alannah MacTiernan MLA, Minister for Planning and Infrastructure, on 19 November 2004.

South Australia

The roles and responsibilities of local government are defined in the Local Government Act 1999. Section 231(2) of the Act requires each council to maintain a register of each local road managed by the council. There is no specific requirement in the Act for councils to maintain local roads in a fit-for-purpose condition. All local roads across the State have been mapped into a Geographical Information System and these maps have been provided to councils.

In 2002-03, South Australian councils spent $168.5 million on local roads and road related infrastructure, such as footpaths. The value, as at 30 June 2003, of the State's council-managed roads infrastructure was $3.6 billion.

In South Australia, regional local government associations identify and prioritise local roads for upgrade under a strategic local road planning process. Each region has developed a strategic plan of its local road network. Funding for roads identified as roads of regional significance (that is, they have benefit to the wider community) is received through the Special Local Roads Program, which is part of the Local Government Financial Assistance Grants Program.

The State-Local Government Relations Agreement does not include an agreement on road funding. However, in 2004-05, the State will contribute $6.3 million to fund council managed local roads through grants for regional roads and for State Black Spots (see Table 4.11). The State will also spend $12 million on local roads in unincorporated areas (which are a State government responsibility).

Table 4.11 South Australia - State government funding for council-managed local roads, 2002-03 to 2004-05

2002-03
($m)

2003-04
($m)

2004-05
($m)

State Black Spot funds for local roads only

0.371

1.820

1.490

State Black Spot funds for local road intersecting State roads

0.825

0.322

0.375

Regional Roads Program

0.663

0.700

0.700

Direct spending on council local roads

6.693

3.539

3.775

Total - council local roads

8.552

6.381

6.340

The Local Government Association of South Australia is helping councils improve their asset management processes. Twenty-six councils are participating in its Step by Step Program that was introduced in 2002. Step by Step aims to help councils achieve individual asset management improvement targets over two years by providing expert advice and mentoring.

Tasmania

Council responsibilities for local roads are identified in s. 21 Part III - Construction, Maintenance, and Management of Local Highways of the Local Government (Highways) Act 1982.

The Local Government Board of Tasmania conducts a review of the operations of each council every eight years. The Board has previously highlighted the effect that neglect of asset maintenance can have on a council's viability.

The Local Government Association of Tasmania recently launched an asset management program called Tasmanian Asset Management Improvement Program. Based largely on the South Australian and Victorian STEPS model, the program aims to improve elected members' understanding of councils' asset holdings and their responsibilities. It aims to help councils extend the life of existing assets, identify assets at risk of deterioration and improve asset refurbishment and maintenance productivity. The Local Government Association of Tasmania has conducted some broad-based sessions for elected members on the Tasmanian Asset Management Improvement Program concepts; however, the program requires adoption at the council level.

The Premier's Local Government Council was set up to develop State-wide agreements between State and local government on issues of mutual concern. The Council, chaired by the Premier, includes nine Mayors from the General Management Committee of the Local Government Association of Tasmania. State and local governments have agreed to establish a new joint initiative to be completed by mid 2006 that aims to find better ways to manage new and existing infrastructure in the State.

All councils in Tasmania have a road asset register. In 2002-03, the replacement value of council maintained roads was $2877 million and the written down value of council maintained roads in Tasmania was $1645 million. The written down value of local road and footpath assets in Tasmania is 56 per cent of current replacement cost (up from 53 per cent in 2001-02). This compares with a written down value of 75 per cent or more that the Western Australian Department of Main Roads uses to benchmark well managed roads. In 2002-03, local government expenditure on roads was about $80 million. 18

The State government does not provide grants to councils for council-managed roads, but it does make some direct expenditure on local roads (see Table 4.12).

Table 4.12 Tasmania - State government funding for council-managed local roads, 2002-03 to 2004-05

2002-03
($m)

2003-04
($m)

2004-05
($m)

Capital Improvement Program assistance to local government

0.154

0.151

0.220

Arthur River road sealing

1.100

0.250

0.000

Line marking and signs on local roads

0.404

0.397

0.079

Signal maintenance/operation on local roads

1.499

1.558

0.150

Total - council local roads

3.157

2.356

0.449

Local government also receives about $1.5 million per annum in heavy vehicle licence fees to help compensate for damage to local roads.

18 Measuring Council Performance in Tasmania 200203.

Australian Capital Territory

The ACT Government is developing an Integrated Asset Management System to facilitate better prioritising and management of local government asset maintenance through collection of data on location, asset type and asset condition. The current replacement value of ACT roads is about $2.4 billion. About $6.7 million per year is needed to maintain municipal (local) roads in a fit-for-purpose condition. In 2004-05 about $6.6 million has been budgeted for local road maintenance.

Regional road groups by state

Most States have established regional roads groups to plan, prioritise and fund local roads that perform a regional function of benefit to the wider community. These groups provide a ready-made structure through which other governments can direct funding to local roads of regional significance. A map of the groups is included in the pocket at the back of this National Report. In South Australia, regional local government associations fulfil a similar function. Amongst other things, they identify and prioritise local roads for upgrade under a strategic local road planning process, using funding provided through the Special Local Roads Program, which is part of the Financial Assistance Grants Program.

NSW

Victoria

Queensland

WA

SA

Central
Metropolitan

Melbourne
Central

North Qld

Metropolitan

Central Local
Government
Region

Metropolitan
North

Metropolitan
North

Wesroc

Gascoyne

Eyre Peninsula
Local Government
Association

South East
Metropolitan

Metropolitan
South East

Southroc

Goldfields-
Esperance

Murray and Mallee
Local Government
Association

Metropolitan
West

Metropolitan
West

Sunroc

Great Southern

South East Local
Government
Association

South Eastern

Melbourne
East

Whitsunday

Kimberley

Southern and Hills
Local Government
Association

Central West

Metropolitan
Southern

Central Qld

Mid West

Spencer Gulf
Cities Local
Government
Association

North Coast

Rural Gippsland

Southern Downs

Pilbara

Mid North Coast

Rural North
Central

South West/
Western Downs

South West

New England

Rural North East

Eastern Downs

Wheatbelt North

Hunter Valley

Rural North West

Morton Bay

Wheatbelt South

South West

Rural South West

Wide Bay/Burnett

Illawarra

Rural South
Central

North West

Orana

Ballarat-centred

Far North Qld
Cape York
Outback

Local Roads - Other developments

The Australian Local Government Association has signed a partnership agreement with Austroads and the Institute of Public Works Engineering Australia 'to improve the management of local roads and the resolution of strategic local road issues ... with the benefit of the knowledge, technology, best practice and research outputs from Austroads activities'.

A more sophisticated approach by councils to asset management could involve:

  • a better understanding of community expectations of the local road system and the implications that has for maintenance of local roads and rating
  • actual condition-based assessment of local roads so funding decisions can be based on empirical data rather than on observation and judgement
  • asset management systems that have consistent data and enable predictions to be made of the consequences of maintenance decisions
  • sharing of productivity improvements across the local road network.

In regard to the second point, one project of interest is the work that ARRB Transport Research is doing with councils to measure and monitor changes in local road conditions at up to 500 sites around Australia over five years (see Figure 4.2).

Figure 4.2 Number of councils and sites in ARRB local road deterioration model by state

Figure 4.2 Number of councils and sites in ARRB local road deterioration model by state

Source: ARRB Transport Research.

The Australian Local Government Association is also examining the opportunity to create a national local roads database that would enable a comparison of aggregated data on councils' road maintenance spending (obtained from Local Government Grants Commissions) with local road condition data.

New Sealed Local Roads Manual due in March 2005

With funding support from the Australian Government, ARRB Transport Research is preparing an upgrade of its Sealed Local Roads Manual, incorporating new technologies and practices, particularly in regard to:

  • application of the latest sealed surfacing techniques
  • new asphalt mix designs
  • revisions to pavement design methods
  • latest maintenance and rehabilitation practices
  • recent technologies applied to condition assessment
  • latest asset management developments and practices
  • risk management and non feasance requirements.

The manual, which is being prepared in consultation with local government and the local roads industry, should be available in June 2005.

Back to Top

Other infrastructure issues

The deterioration of local government assets, including local roads, is occurring in all States in Australia and needs to be addressed. But the deterioration of local roads is not unique to Australia. It is also occurring in Canada, the United Kingdom and the United States (see 'Australia is not alone in facing shortages of funds for road maintenance').

Australia is not alone in facing shortages of funds for road maintenance

United States

According to the American Society of Civil Engineers' 2003 Progress Report for America's Infrastructure, America's roads and bridges are graded D+ and deteriorating. The United States Government's own reports corroborate the need to spend more on roads to maintain them in their existing condition. Chapter 7 of the United States Federal Highways Administration's Status of the Nation's Highways, Bridges, and Transit: 2002 Conditions and Performance Report estimates average annual outlays by all spheres of government over 2001-20 would have to increase by 17.5 per cent to reach their projected US$75.9 billion annual 'cost to maintain' level. The 'cost to maintain' level is the amount needed to maintain the conditions and performance of the highway system at a level sufficient to keep average highway user costs from rising above their 2000 levels.1

The American Association of State Highway and Transportation Officials' Bottom Line Report has an even bolder estimate. It estimates that capital outlays by all spheres of government would have to increase by 42 per cent to reach the projected US$92 billion 'cost to maintain' level.2

According to the American Association of State Highway and Transportation Officials however, the 2005 budget proposal, released by the United States administration proposed that highway expenditure be frozen at US$33.6 billion annually through 2009 to reduce the budget deficit.3 About US$600 million a year of this money is transferred to local government for spending on roads.4

The pressure to cut spending to balance budgets is also being felt at the local level. The City Manager, City of Santa Cruz commenting on the budget crisis in the General Fund after the City cut over US$7 million from its General Fund said:

The proposed budget includes $750 000 for street reconstruction and overlay, an amount that is woefully insufficient by any standard. In 1999, it would have cost $25 million to bring all the City's streets into good condition, and $2 million per year to keep them there. To do the same in 2003 would have cost $44 million, plus $2 million per year. As the City's streets continue to deteriorate, the cost of returning them to good condition will continue to escalate sharply, because it is so much more expensive to rebuild a street that is in poor condition than to maintain a street that is in good condition ... The only practical answer ... is the adoption of a bond measure that would provide a huge infusion of funds to pay for extensive maintenance projects. The City could do this on its own, or as part of a larger regional transportation bond.5

Canada

The Federation of Canadian Municipalities (FCM) says Canada has a national municipal infrastructure deficit of C$60 billion that is growing at the rate of C$2 billion a year.6

According to the FCM, Canadian municipalities spend about C$12-$15 billion a year on infrastructure. Almost 60 per cent of the C$1.6 trillion network of roads, bridges, sewers and water mains - and other components - is more than 50 years old. Some 30 per cent is more than 80 years old and nearing the end of its service life.

On 15 November 2004, the Governments of Canada and Ontario signed an agreement to each provide up to C$298 million over the next five years to improve public infrastructure in small urban and rural municipalities. Participating communities must contribute one-third of the cost of any project, bringing the investment to C$900 million.

The Government of Canada plans to conclude similar agreements with each province and territory under its C$1 billion Municipal Rural Infrastructure Fund. A similar agreement was concluded with the Province of Manitoba on 3 December 2004. Up to 1 per cent of the Municipal Rural Infrastructure Fund will be available to help municipalities improve their asset management.

The Government of Canada news release said:

The investments will help communities improve water and sewage treatment and waste management, fix local roads and repair bridges, as well as help address other health and safety priorities. Other funding categories include: public transit, municipal energy improvement, cultural, recreational and tourism infrastructure, and connectivity.

The Municipal Rural Infrastructure Fund builds on the success and lessons learned from previous programs, especially the $2.05 billion Infrastructure Canada Program and complements programs such as the $4 billion Canada Strategic Infrastructure Fund, which addresses larger infrastructure needs, primarily in urban areas.7

United Kingdom

The United Kingdom Parliamentary Committee on Transport considered the non-trunk road network to be in a much worse condition than it was in 1980, more than 20 years ago.8

The Committee suggested that,

As a first step to prioritising local road maintenance, we recommend that the Department publish an annual comparison of the planned and actual expenditure on road maintenance along with details of road quality for each local authority. People need better information about the performance of their local authorities.9

The Committee observed that,

The true extent of the maintenance backlog for roads is unclear. The Department for Transport estimated the backlog to be £3.75 billion in 2000. A survey of 30 per cent of local authorities conducted by the Institution of Civil Engineers estimated the backlog of road and bridge maintenance to be £5.5 billion. A survey of almost half of all local authorities by the Asphalt Industry Alliance found that there had been a shortfall of £1.1 billion per year in road maintenance across Britain.10

We are now in a situation where one-third of budgets are being spent on reactive, patch and mend maintenance and tens of millions of pounds spent on insurance premiums and pay outs to injured third parties. Some local authorities appear to have little grip on the situation with 75 per cent of highways services classed as fair or poor. The slow but steady squeeze on resources for local maintenance over the last decade has taken a heavy toll ... only one-quarter of local authorities are able to provide good or excellent highway services. The results too often are a lack of information about the scale of the problems, a significant skill shortage and badly managed systems. A local commitment to funding and prioritising highway services and good public information are an essential part of this.11

The Transport Committee said:

We welcome the significant increase in funding for local road maintenance provided by the Department since 2001 ... evidence to date suggests that the rise in the maintenance backlog of road surfaces may have been halted. It is far less obvious that the Government is on-track to meet its target to eliminate the backlog of local road maintenance by 2010. The local road network is still in a much worse state than throughout the 1970s and 1980s and the true extent of the backlog is not yet known. Even the extra money provided has not made up the hole in expenditure between 1994 and 2001, nor has it allowed for recent increases in the costs of construction. In addition, there are almost 25 per cent (5 million) more vehicles on the roads today than in 1991.12

Responding to these criticisms, the Department of Transport in its 10 Year Plan for Transport set out 'to eliminate the road maintenance backlog by 2010'. It acknowledged that 'local road maintenance has suffered from years of neglect' and that it 'needed to get a better estimate of the existing backlog and a better understanding of how much money will be needed to clear the backlog over the remaining life of the 10 Year Plan.' The Department was undertaking a National Road Maintenance Condition survey to estimate the cost of the outstanding maintenance work. The Department also required councils to produce five-year transport plans.13

1 See www.fhwa.dot.gov/policy/2002cpr/ch7.htm.
2 See American Infrastructure Report Card at www.asce.org/reportcard/index.cfm?reaction=full&page=6#roads.
3 See American Association of State Highway and Transportation Officials, media release, 3 February 2004.
4 Federal Highways Administration Innovative Finance Performance Review p. 2 at www.fhwa.dot.gov/innovativefinance/perfreview/sect1.htm.
5 Wilson 2004, City Manager, City of Santa Cruz, California USA, p. 4. For an even bleaker update, that begins 'The City is winding up a bad year, from a financial point of view, and preparing to begin a worse one . '.' see www.ci.santa-cruz.ca.us/fn/0304bud/05%20Budget%20Message.pdf.
6 Source www.fcm.ca/ at 9 September 2004.
7 Source: www.infrastructure.gc.ca/ at 8 December 2004.
8 Local Roads and Pathways Fifth Report of Session 2002-03 Volume 1, p. 16, at www.publications.parliament.uk/pa/ cm200203/cmselect/cmtran/407/40702.htm 25 June 2003.
9 ibid. p. 9.
10 ibid. p. 14
11 ibid. p. 16
12 ibid. p. 16
13 The government's response to the transport committee's report on local roads and pathways, October 2003 pp. 2-3 at www.communities.gov.uk/corporate/publications/all/.

New Zealand has taken steps to arrest the deterioration of its local roads. New Zealand's Local Government Amendment Act (No. 3) of 1996 required councils to fund asset depreciation (defined as loss of service potential) from operating revenue and required all councils to develop detailed asset management plans for councils' assets (Rosson 2000, p. 10). Council asset management plans are audited, and improvement plans are developed and published. New Zealand's approach is attractive, but implementing it in Australia would not be straightforward. Australia has a much greater road length and a more dispersed population. Many councils in rural and remote parts of Australia are undergoing depopulation and they may not have the financial capacity to fully fund asset depreciation. Queensland's Local Government Act comes closest to matching New Zealand's approach. It requires that 'local government must have systems in place to ensure [that] ... assets are protected from loss' (see the Queensland section below).

In Australia, local road expenditure typically accounts for about 20 to 25 per cent of council budgets. The apparent gap of about $344 million (after Roads to Recovery funding) between what local governments spend and what they need to spend on local roads to maintain them in a fit-for-purpose condition is about 8 per cent of the $3805 million spent annually on local roads (or about 2 per cent of the $19 billion in total local government spending). This gap could be bridged in many ways - for instance, by improving council productivity, by extra spending, or by redirecting road capital expenditure to road maintenance. Some key elements of a possible national local roads strategy are outlined below (see 'A possible national local government roads strategy').

A possible national local government roads strategy

Local government could set itself a national goal to manage its local road in a fit-for-purpose condition by 2008-09, erasing the $344 million local road deficit. This would improve resident satisfaction, improve access to schools, hospitals, workplaces and shops, benefit local businesses and reduce public liability claims. Some steps that could be considered are:

  • Australian and State governments and Local Government Associations could:
    • set targets for achieving the goal and put in place ways of measuring achievements
    • make more explicit councillors' responsibility for managing local government's assets
    • fund ongoing research into better local government asset management
    • maintain high levels of communication and cooperation between all stakeholders with an interest in maintaining a good local road network
    • encourage debate on ways for councils to better meet the costs of infrastructure (for example, examine whether urban councils in Australia could implement New Zealand's approach of requiring councils to fully fund operating expenditure, including depreciation, from operating revenue or consider the wider application of the new approach to road management adopted in Victoria).
  • Councils could:
    • improve awareness of asset management issues amongst residents
    • establish local road service standards by consulting with local communities and businesses
    • implement measures to maximise revenue from road related infrastructure (such as car parks) and to reduce demand on the local road system (see 'New study to help councils maximise parking revenues')
    • give maintenance expenditure priority over new capital expenditure
    • find efficiency savings in local road construction and maintenance.

Once the goal of sustainability has been achieved, councils could set a more ambitious goal of significantly improving the local road network to optimise transport outcomes.

Local government is currently collecting some of the data that would be needed to support a national approach. The Australian Local Government Association, together with each State Local Government Association, is currently developing a national framework for local government road asset management data collection that will cover issues such as local road condition, expenditure, maintenance levels and maintenance costs. It also plans to make better use of the data held by Local Government Grants Commissions on local road funding and expenditure. Some States are making good progress on councillor education and Victoria's Road Management Act 2004 is improving the way councils manage local roads (see the section on Victoria below).

New study to help councils maximise parking revenues

Step eight of the possible national local roads strategy refers to the need to maximise revenues from road related infrastructure, one of which is car parks. The Australian Road Research Board is currently doing a five-year study to help councils maximise parking revenues by allowing councils to compare best practice parking operations (for example, automated payment collection) with other councils (Institute of Public Works Engineering 2004, p. 23).

State developments in road funding and asset management

New South Wales

Under s. 163 of the Roads Act 1993 all New South Wales councils must have a local road asset register. Local governing bodies must consult with their communities on local road service standards before determining the level of rates through the draft management plan (s. 402 Local Government Act 1993). Rate pegging restricts their capacity to raise rates, so that in 2002-03 average rates per capita in New South Wales of $351 were about $19 (5%) below the Australian average of $370 per capita. Any council wishing to increase its general income above a prescribed limit must apply for a special variation. If the council demonstrates community support for its proposal, approval is usually granted.

In 2002-03, council local road assets were valued at $31.9 billion at current cost and $19.7 billion in the written down value or 62 per cent of the current cost, suggesting 38 per cent of the assets have been consumed. In 2002-03, New South Wales councils spent $684 million on maintenance of all types of infrastructure but they needed to spend about 25 per cent more than that ($912 million) to maintain them in a sound condition. Forty- eight councils were spending sufficient money to maintain their assets while 124 councils were not. Seventeen councils needed to spend more than $100 million to restore their assets to a satisfactory condition.14

In 2004-05, the New South Wales budget provided $136.6 million to councils to help them manage their roads (see Table 4.6). Most of the funds are grants 'to assist Councils to manage their secondary arterial road network' and most will be spent on regional roads, where there is a blurring of responsibility between State and local governments. Regional roads are council owned and managed, but because of their regional significance they qualify for State Government assistance. They are broadly equivalent to roads that in other States are called 'roads of regional significance'.

Table 4.6 New South Wales - State government funding for council-managed local roads, 2002-03 to 2004-05

2002-03
($m)

2003-04
($m)

2004-05
($m)

Block grant for local government

108.3

111.2

113.7

Repair program grant for local government
21.6
22.4
22.9

Total - council local roads

129.9

133.6

136.6

The State Government funding has two components: $113.7 million is a block grant which is allocated on a formula basis according to road length, traffic and the cost of traffic facilities and the remaining $22.9 million is Repair Program Grants, which councils match dollar-for-dollar, for high priority works determined on merit by regionally-based consultative committees of councils.

The start of the State government's Regional Roads Timber Bridge Program has been deferred until July 2007. The program aimed to provide $105 million to help councils upgrade 369 timber bridges on their regional roads.

The State government has established a New South Wales Road Classification Review panel to review the classification of State and regional roads to take account of demographic, economic or other changes that may affect the relative importance of these roads. The aim is to identify which roads qualify for State funding. The review is to be cost neutral for the State government. The review should help clarify what is a local road, regional road and state road.

The Institute of Public Works Engineering Australia has re-established its National Asset Management Committee and has established a web site to encourage networking between councils. The Institute of Public Works Engineering Australia of New South Wales has a Standing Committee on Roads and Transport and has established a Roads and Transport Directorate with a regional network of 13 regional road groups covering 153 councils. The Committee is working with the Roads and Traffic Authority and the Motor Accidents Authority to improve standards for measuring and reporting on the condition of local government assets. The Directorate aims to help members improve their asset management roles, compare their performance with other councils and seek greater financial support for local roads and transport.

14 NSW Department of Local Government, 'Structural Reform of Local Government in NSW', at www.dlg.nsw.gov.au/dlg/dlghome/dlg_home.asp 15 September 2004.

Victoria

The Road Management Act 2004 regulates road management responsibilities in Victoria. It requires councils, from 1 July 2004, to keep a register of roads for which they are responsible, to develop asset management plans for those roads and to maintain them according to the standards councils set. The Act has transferred the responsibility for 11 000 kilometres of main roads from local government to the state road authority, providing greater clarity in roles and responsibilities. Until recently, these arterial or main roads were owned by the State government and managed, by agreement, by the local council.

Victoria's Auditor-General audited the management of roads of nine councils in 2002 and was critical of their performance. In the follow-up audit in 2004, the Auditor-General found that:

all nine councils examined had started improving their road management practices [and that] although not all recommendations were fully implemented by all councils, progress to date is satisfactory. Legislative changes, and a major council asset management initiative, will assist councils to continue to improve their road management practices.15

The Victorian Government provides grants to a number of rural councils to help them develop asset management plans. It has also provided one-on-one support to a number of pilot councils to establish sound asset management planning, and organised a workshop for councillors on strategic asset management. The need for an ongoing training program is being investigated.

In December 2003, the Victorian Government released asset management guidelines for local government called Sustaining Local Assets. Local Government Victoria's Asset Management Performance Measures Project will help councils to measure their own asset management performance, to benchmark their performance against like council groupings and demonstrate continuous improvement to their communities. Local Government Victoria organised training for this project during May-June 2004; and will collect aggregate data annually.

The Municipal Association of Victoria has introduced a Program called STEP to help councils improve their asset management planning and processes. It aims to help councils achieve a minimum standard of asset management process within two years. Seventy- five councils are involved in the program. Councils are assessed by independent providers and reassessed every six months to establish asset management targets to close the recurrent funding gap in assets and infrastructure renewal. According to the Municipal Association of Victoria, since 2002, local government's asset management rating has improved from an 'F' to a 'C', a substantial and sustained improvement. In response to AusLink, the Municipal Association of Victoria and Vic.Roads have established regional groups of councils to strategically manage their local road network and to seek Australian Government funding.

The Municipal Association of Victoria has established a web-based Asset Management Knowledge Base that enables councils to access knowledge on best current practice and statistics on economic life based on actual performance. It plans to produce a 'Cook Book' for practitioners to show links between management practices and life cycle results, optimum asset management methods and economic life and life cycle costs. The Knowledge Base also allows councils to record asset performance data to improve asset accounting and auditing. The Municipal Association of Victoria is also supporting the need for a 'national interoperable data framework' so project proposals can be readily assessed for their relative merits and viability.

In 2002-03, Victoria's councils spent $758 million on local roads and bridges. Of that figure, $534 million was operational expenditure and $224 million was capital outlays. Councils are not subject to rate restrictions but they must consult communities on rate increases. The Local Government Act 1989 incorporates best value principles that require service standards to be set for all services. Councils must develop, under their four-year Council Plan, a Strategic Resource Plan detailing the resources (including infrastructure assets) required to provide the services.

Victoria's data on local government infrastructure spending shows that councils are spending 81 per cent of the amount needed to replenish average annual asset consumption; and that 58 per cent of respondents to a 2003 community satisfaction survey rated council performance in providing local roads and footpaths as 'excellent, good or adequate' while 42 per cent said they 'need improvement'.

State government funding for local roads is available for specific purposes such as accident prevention and is provided through the State Impacted Local Road component of the Better Roads Victoria Program, the State Black Spot Safety Program and through funds for local road crossings over the Murray River, under the Murray River Bridges and Punts Agreement with New South Wales (see Table 4.7).

The $12 million provided for State Impacted Local Roads under the Better Roads Victoria Program is for reconstructing and upgrading local roads where the nature and volume of traffic has been or is predicted to be significantly affected by State government initiatives, such as changes in grain transport routes or the cartage of timber from crown lands. Proposals for improvements to local timber roads should reflect priorities in Timber Industry Roads Evaluation Studies (TIRES) and outcomes of TIRES regional forums.

Table 4.7 Victoria - State government funding for council-managed local roads, 2002-03 to 2004-05

2002-03
($m)

2003-04
($m)

2004-05
($m)

State impacted local road component of the Better Roads Victoria Program

10.84

12.04

12.03

State Black Spot funds for local roads

18.41

0.75

0.00

Natural Disaster funds

1.04

1.36

0.00

Direct spending on local roads/bridges

0.13

2.35

0.35

Total - council local roads/bridges

30.42

16.50

12.38

Victoria's Cardinia Shire - Design, construct and maintain

Victoria's Cardinia Shire has found a new way to improve its local roads. It has signed a 15-year partnership with Downer EDI's Works Infrastructure division to seal and maintain a 50-kilometre network of unsealed roads. Construction over two years will cost about $13 million. Downer will design, construct and maintain the roads that will be financed by the Shire. The Shire will make maintenance payments to Downer provided the network is maintained to an adequate standard. The partnership will deliver better roads sooner and achieve significant economies of scale. The Shire will pay about $3.4 million for whole-of-life costs for the roads, covering initial sealing of the roads, rural road resealing every 10 years and residential road resealing every 25 years.

Victoria's Gannawarra Shire - Making hard choices on dirt roads

In response to Victoria's Road Management Bill, Gannawarra Shire Council is considering deregistering 1200 kilometres of dirt roads (half the Shire's total road length). This would see the Council no longer carrying out maintenance on these roads and liability for use of the roads would rest with the road user. Gravel roads would only be maintained every two to three years. These measures would reduce road maintenance costs to more affordable levels.16

15 Report on Public Sector Agencies: Results of special reviews and financial statement audits for agencies with 2003 balance dates other than 30 June, Auditor-General of Victoria, May 2004 at www.audit.vic.gov.au/.
16 Deputy Mayor Cr Graeme Mann in the Koondrook and Barham Bridge News p. 3 on 24 September 2004.

Queensland

The Council is custodian of local government's assets. Queensland's Local Government Act's Finance Standards s. 33(2) states 'Local government must have systems in place to ensure (c) assets are protected from loss.'

The Queensland Government provides significant support to councils to improve their local roads management. Under its Local Roads Management and Investment Alliance, Queensland's Department of Main Roads and the Local Government Association of Queensland have agreed to build local government road management capability. The Department of Main Roads is spending $6 million over four years to develop council capability in the areas of:

  • asset management - including roads and bridges
  • road and bridge asset condition evaluation
  • road investment strategies
  • project prioritisation and investment decision making
  • roads safety risk management.

Queensland has 15 regional road groups made up of representatives from the Department of Main Roads and local government. The regional road groups make investment decisions on a group of State and local roads that the regional road groups recognises as regionally important - called local roads of regional significance. Under the alliance, local governments have agreed to collect road asset data on the local roads of regional significance network and are encouraged to collect it on their whole network. The intent is for the Local Government Association of Queensland to house State-wide local government asset data for local roads of regional significance and eventually the entire local road network.

In 2004-05, the Queensland Government will allocate $82 million in grants to local governing bodies for council-managed roads under its Transport Infrastructure Development Scheme, which is a major boost in funding (see Table 4.8). Some of this money will be spent on upgrading the local roads of regional significance. Funding for local roads of regional significance is available on a 50:50 funding basis with local councils, except for access roads for Indigenous communities where the State provides 100 per cent of the funds.

Table 4.8 Queensland - State government funding for council-managed local roads, 2002-03 to 2004-05

2002-03
($m)

2003-04
($m)

2004-05
($m)

Transport and Infrastructure Development Scheme

32.171

43.160

82.429

Western Australia

Western Australia has well-established local road planning arrangements that enable councils to identify, prioritise and fund their strategic local road network and to monitor the adequacy of their road preservation expenditure.

The responsibility of councils to preserve their assets is set out in Western Australia's Local Government Act 1995. Part 5 Division 5 Section 5.52C of the Act designates a program for replacing the local government's major assets as a 'principal activity'. The Act requires local governments to prepare an annual report containing 'a report of the principal activities commenced or continued during the financial year' and to assess 'local government's performance in relation to each principal activity'. Each local government must 'prepare a plan for the next four or more financial years' with 'the estimated cost of, and proposed means of funding, each principal activity'. Every local government maintains a road inventory using a program called ROMAN and there is a Road Forum each year to address local road issues and help councils meet their road management responsibilities.

There are no restrictions imposed by the State government on local governments raising rates to bring their roads to a fit-for-purpose condition, nor is there any requirement for local governments to consult their communities before determining rate levels.

The State Road Funds to Local Government Agreement 2000-01 to 2004-05, provides one- quarter of the State's road-related revenue (for example, vehicle registration charges) to councils for local roads, with a guaranteed minimum allocation of $90 million per year for each of the five years. In 2003-04, the Western Australian Government provided only $80 million (see Table 4.9). In 2004-05 it will provide almost $81 million. This is $11 million less than the minimum of $92 million pledged under the Agreement for 2004-05.

Table 4.9 Western Australia - State government funding for council-managed local roads, 2000-01 to 2004-05

200001
($m)
200102
($m)
200203
($m)
200304
($m)
200405
($m)
State Roads Funding Agreement
107.572
107.652
100.024
80.068
80.683

Source: Steve Hutching Main Roads WA, personal communication, 7 October 2004.

Under the current agreement, 10 regional road groups drawing membership from elected local government representatives identify, prioritise and fund key regional roads. The groups enable elected members to consider the strategic transport needs of their region rather than just the localised road needs of their council area. The groups use multi-criteria analysis, incorporating transport, social, economic, financial, road safety and environmental factors to rank road projects. They make recommendations to the State Road Funds to Local Government Advisory Committee, a body comprising representatives of Main Roads WA and the Western Australian Local Government Association that determines the distribution of State Local Road Funds. Main Roads WA with input from regional road groups has developed a 20-year plan called 'Roads 2020' for the more important local roads.

Each year the Western Australian Local Government Association compiles, from data collected from councils, its Local Government Road Assets and Expenditure Report that provides a snapshot of investment in the local road network from all spheres of government. In 2002-03, total local government expenditure on local roads was $384.3 million made up of $139.6 million on maintenance, $112.1 million on renewal of existing roads, $101.4 million on upgrading and $31.2 million on capital expansion.

The 2002-03 local road deficit of $73.1 million arose because $324.8 million needed to be spent to maintain roads in their current condition, but only $251.7 million was spent on local road maintenance and renewal.

Councils spent $112.1 million on asset renewal in 2002-03, representing about 1 per cent of the current replacement value of the State's local road infrastructure. This is only half the 2 per cent of road infrastructure that wears out each year.

The current replacement value of local roads in Western Australia was $11 960 million in 2002-03 but the written down value was $7730 million, or 65 per cent of the asset's value (see Table 4.10). According to Main Roads WA, this percentage should be about 75 per cent for a well-managed road network. To restore the asset to a sound condition would require an immediate investment of an extra $1240 million. To put this in perspective, the councils would need to spend triple the $383 million they spent on roads in 2002-03 just to restore their local roads to a sound condition.

Table 4.10 Western Australia - local government road assets and expenditure,a 1998-99, 2001-02 and 2002-03

1998-99
($m)

2001-02
($m)

2002-03
($m)

Replacement value

$9 890

$11 360

$11 960

Written down value

$6 520

$7 330

$7 730

Status quo cost (to maintain roads in current condition)

$271

$307

$324.8

Council expenditure on preservation of existing roads excluding flood damage

$204.3

$263.7

$250.5

Council expenditure on flood damage

$0.9

$7

$1.2

Council expenditure on upgrading and building new roads

$97.2

$137.4

$132.6

Note: a Does not include Main Roads allocations for major projects that are spent by Main Roads.
Source: Report on Local Government Road Assets and Expenditure 2002-03, Western Australian Local Government Association, p. 7.

On 19 November 2004, the Western Australian Government announced it would reinstate $23 A million for local road projects that were deferred over the last two years due to budget cuts. The money will be allocated to the State's 10 Regional Road Groups, who have already determined priority road projects at a local level. The State government also announced that it had agreed that under the new five-year State Road Funds to Local Government Agreement, due to come into effect on 1 July 2005, 'local government would get 25 per cent of the road user charge component of vehicle licence fees. This would see the current budget allocation to local government increase by about $22 million over the next four years and would ensure a clear revenue growth stream over the life of the agreement.' 17

17 Media Statement by the Hon. Alannah MacTiernan MLA, Minister for Planning and Infrastructure, on 19 November 2004.

South Australia

The roles and responsibilities of local government are defined in the Local Government Act 1999. Section 231(2) of the Act requires each council to maintain a register of each local road managed by the council. There is no specific requirement in the Act for councils to maintain local roads in a fit-for-purpose condition. All local roads across the State have been mapped into a Geographical Information System and these maps have been provided to councils.

In 2002-03, South Australian councils spent $168.5 million on local roads and road related infrastructure, such as footpaths. The value, as at 30 June 2003, of the State's council-managed roads infrastructure was $3.6 billion.

In South Australia, regional local government associations identify and prioritise local roads for upgrade under a strategic local road planning process. Each region has developed a strategic plan of its local road network. Funding for roads identified as roads of regional significance (that is, they have benefit to the wider community) is received through the Special Local Roads Program, which is part of the Local Government Financial Assistance Grants Program.

The State-Local Government Relations Agreement does not include an agreement on road funding. However, in 2004-05, the State will contribute $6.3 million to fund council managed local roads through grants for regional roads and for State Black Spots (see Table 4.11). The State will also spend $12 million on local roads in unincorporated areas (which are a State government responsibility).

Table 4.11 South Australia - State government funding for council-managed local roads, 2002-03 to 2004-05

2002-03
($m)

2003-04
($m)

2004-05
($m)

State Black Spot funds for local roads only

0.371

1.820

1.490

State Black Spot funds for local road intersecting State roads

0.825

0.322

0.375

Regional Roads Program

0.663

0.700

0.700

Direct spending on council local roads

6.693

3.539

3.775

Total - council local roads

8.552

6.381

6.340

The Local Government Association of South Australia is helping councils improve their asset management processes. Twenty-six councils are participating in its Step by Step Program that was introduced in 2002. Step by Step aims to help councils achieve individual asset management improvement targets over two years by providing expert advice and mentoring.

Tasmania

Council responsibilities for local roads are identified in s. 21 Part III - Construction, Maintenance, and Management of Local Highways of the Local Government (Highways) Act 1982.

The Local Government Board of Tasmania conducts a review of the operations of each council every eight years. The Board has previously highlighted the effect that neglect of asset maintenance can have on a council's viability.

The Local Government Association of Tasmania recently launched an asset management program called Tasmanian Asset Management Improvement Program. Based largely on the South Australian and Victorian STEPS model, the program aims to improve elected members' understanding of councils' asset holdings and their responsibilities. It aims to help councils extend the life of existing assets, identify assets at risk of deterioration and improve asset refurbishment and maintenance productivity. The Local Government Association of Tasmania has conducted some broad-based sessions for elected members on the Tasmanian Asset Management Improvement Program concepts; however, the program requires adoption at the council level.

The Premier's Local Government Council was set up to develop State-wide agreements between State and local government on issues of mutual concern. The Council, chaired by the Premier, includes nine Mayors from the General Management Committee of the Local Government Association of Tasmania. State and local governments have agreed to establish a new joint initiative to be completed by mid 2006 that aims to find better ways to manage new and existing infrastructure in the State.

All councils in Tasmania have a road asset register. In 2002-03, the replacement value of council maintained roads was $2877 million and the written down value of council maintained roads in Tasmania was $1645 million. The written down value of local road and footpath assets in Tasmania is 56 per cent of current replacement cost (up from 53 per cent in 2001-02). This compares with a written down value of 75 per cent or more that the Western Australian Department of Main Roads uses to benchmark well managed roads. In 2002-03, local government expenditure on roads was about $80 million. 18

The State government does not provide grants to councils for council-managed roads, but it does make some direct expenditure on local roads (see Table 4.12).

Table 4.12 Tasmania - State government funding for council-managed local roads, 2002-03 to 2004-05

2002-03
($m)

2003-04
($m)

2004-05
($m)

Capital Improvement Program assistance to local government

0.154

0.151

0.220

Arthur River road sealing

1.100

0.250

0.000

Line marking and signs on local roads

0.404

0.397

0.079

Signal maintenance/operation on local roads

1.499

1.558

0.150

Total - council local roads

3.157

2.356

0.449

Local government also receives about $1.5 million per annum in heavy vehicle licence fees to help compensate for damage to local roads.

18 Measuring Council Performance in Tasmania 200203.

Australian Capital Territory

The ACT Government is developing an Integrated Asset Management System to facilitate better prioritising and management of local government asset maintenance through collection of data on location, asset type and asset condition. The current replacement value of ACT roads is about $2.4 billion. About $6.7 million per year is needed to maintain municipal (local) roads in a fit-for-purpose condition. In 2004-05 about $6.6 million has been budgeted for local road maintenance.

Regional road groups by state

Most States have established regional roads groups to plan, prioritise and fund local roads that perform a regional function of benefit to the wider community. These groups provide a ready-made structure through which other governments can direct funding to local roads of regional significance. A map of the groups is included in the pocket at the back of this National Report. In South Australia, regional local government associations fulfil a similar function. Amongst other things, they identify and prioritise local roads for upgrade under a strategic local road planning process, using funding provided through the Special Local Roads Program, which is part of the Financial Assistance Grants Program.

NSW

Victoria

Queensland

WA

SA

Central
Metropolitan

Melbourne
Central

North Qld

Metropolitan

Central Local
Government
Region

Metropolitan
North

Metropolitan
North

Wesroc

Gascoyne

Eyre Peninsula
Local Government
Association

South East
Metropolitan

Metropolitan
South East

Southroc

Goldfields-
Esperance

Murray and Mallee
Local Government
Association

Metropolitan
West

Metropolitan
West

Sunroc

Great Southern

South East Local
Government
Association

South Eastern

Melbourne
East

Whitsunday

Kimberley

Southern and Hills
Local Government
Association

Central West

Metropolitan
Southern

Central Qld

Mid West

Spencer Gulf
Cities Local
Government
Association

North Coast

Rural Gippsland

Southern Downs

Pilbara

Mid North Coast

Rural North
Central

South West/
Western Downs

South West

New England

Rural North East

Eastern Downs

Wheatbelt North

Hunter Valley

Rural North West

Morton Bay

Wheatbelt South

South West

Rural South West

Wide Bay/Burnett

Illawarra

Rural South
Central

North West

Orana

Ballarat-centred

Far North Qld
Cape York
Outback

Local Roads - Other developments

The Australian Local Government Association has signed a partnership agreement with Austroads and the Institute of Public Works Engineering Australia 'to improve the management of local roads and the resolution of strategic local road issues ... with the benefit of the knowledge, technology, best practice and research outputs from Austroads activities'.

A more sophisticated approach by councils to asset management could involve:

  • a better understanding of community expectations of the local road system and the implications that has for maintenance of local roads and rating
  • actual condition-based assessment of local roads so funding decisions can be based on empirical data rather than on observation and judgement
  • asset management systems that have consistent data and enable predictions to be made of the consequences of maintenance decisions
  • sharing of productivity improvements across the local road network.

In regard to the second point, one project of interest is the work that ARRB Transport Research is doing with councils to measure and monitor changes in local road conditions at up to 500 sites around Australia over five years (see Figure 4.2).

Figure 4.2 Number of councils and sites in ARRB local road deterioration model by state

Figure 4.2 Number of councils and sites in ARRB local road deterioration model by state

Source: ARRB Transport Research.

The Australian Local Government Association is also examining the opportunity to create a national local roads database that would enable a comparison of aggregated data on councils' road maintenance spending (obtained from Local Government Grants Commissions) with local road condition data.

New Sealed Local Roads Manual due in March 2005

With funding support from the Australian Government, ARRB Transport Research is preparing an upgrade of its Sealed Local Roads Manual, incorporating new technologies and practices, particularly in regard to:

  • application of the latest sealed surfacing techniques
  • new asphalt mix designs
  • revisions to pavement design methods
  • latest maintenance and rehabilitation practices
  • recent technologies applied to condition assessment
  • latest asset management developments and practices
  • risk management and non feasance requirements.

The manual, which is being prepared in consultation with local government and the local roads industry, should be available in June 2005.

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