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Progress in improving efficiency and effectiveness of local government

Effective and efficient local government is important because local government delivers key economic, social and environmental services to its communities.

This section incorporates reports from all State departments and some local government associations on activities in 2002-03 towards meeting these aims. It includes progress reports on developing performance indicators, reforming legislation, implementing National Competition Policy and other microeconomic reforms.

New South Wales

Department of Local Government

National Competition Policy

The State is required to review its legislation in accordance with the Competition Principles Agreement signed in 1995. The review of the Local Government Act 1993 has been an exhaustive process resulting in a comprehensive analysis of the provisions of the Act in light of competition policy. An issues paper in 2000 was widely advertised and a reference group established. The review committee, comprising senior officers from the Department of Local Government, the Cabinet Office and New South Wales Treasury, guided the recommendations for reform contained in the National Competition Policy - Review of the Local Government Act 1993.

The government passed the Local Government Amendment (National Competition Policy Review) Act 2003 in May 2003 and the Act was assented to by the Governor on 2 June 2003. The Act:

  • removes the requirement for business approvals for undertakers and mortuary businesses, as these businesses are sufficiently regulated under public health legislation and the Local Government (Orders) Regulation 1999
  • allows greater market entry by allowing councils to access bulk purchasing arrangements of certain organisations, subject to appropriate probity and transparency requirements applying to such organisations
  • introduces greater flexibility for councils to set fees for business and 'contestable' activities, while still maintaining accountability to the community
  • removes the current restrictions on income raised from rent of community land
  • defines the ways in which monies received through business activities and required to be held in a restricted use fund can be transferred to general funds, for transfer of dividends and community service obligations.

These amendments to the Local Government Act 1993 remove anti-competitive provisions from the Act and will commence in two stages on 1 September 2003 and 1 November 2003.

Progress in developing performance indicators for local government

New South Wales released the 2001-02 Comparative Information on New South Wales Local Government Councils in May 2003. This was the 12th year the publication has been produced and the report now contains 34 performance indicators. The information contained in the publication was collected by electronic surveys of councils. The department produces three data collections relating to rates, finances and general information. The information collected has also been used to calculate financial assistance grants, analyse councils' financial health and check compliance of rates collected. Councils were emailed the data to be published for confirmation and to provide an opportunity to make corrections to the most recent year.

Time series data for each indicator will be provided in the 2001-02 publication. New South Wales will continue to review and develop appropriate performance measures.

To promote use and transparency/accountability the department continues to make the publication and the raw data freely available and accessible via the Internet.

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Department for Victorian Communities

The Department for Victorian Communities was established in December 2002, and brings together 15 portfolios including Local Government, Employment and Youth Affairs, Aboriginal Affairs, Women's Affairs and Multicultural Affairs. Essentially, the department has a focus on people and place.

The department's two fundamental aims are to strengthen communities and to integrate (or 'join up') services at the local level. Inclusion of the Local Government and Regional Services Division within the department recognises local government's critical role in community building and local service delivery.

Priorities for 2002-03 included continued implementation of Best Value, introduction of the Local Government Improvement Incentive Program and further work to help local governments manage their infrastructure assets. Legislative measures included constitutional recognition of local government and further work to update the Local Government Act 1989. Machinery of government changes after the November 2002 Victorian State Election recognise the role of local governments in community strengthening.

Implementation of Best Value

Best Value Victoria was introduced in December 1999 and requires all local governments to apply Best Value principles to their services by December 2005. The Best Value Victoria principles include establishing quality and cost standards, responsiveness, accessibility, consultation, continuous improvement and community reporting.

In 2002-03, the Best Value efforts of the Local Government and Regional Services Division, Department for Victorian Communities, have concentrated on supporting the Best Value networks among councils and further developing support initiatives around good governance and community consultation.

The Good Governance Advisory Group is a partnership between the peak bodies (the Municipal Association of Victoria, the Victorian Local Governance Association and LGPro), and the Local Government and Regional Services Division. In 2002, the Group commissioned a comprehensive study into governance practice throughout the sector. The study is almost complete.

The Division has worked with and funded the Victorian Local Governance Association to develop a web site dedicated to community consultation and engagement. It provides case studies, information on various methodologies and an interactive discussion site. The web site can be found at www.vlgaconsultation.org.au/.

The Best Value Commission, established in 2000 to advise the Minister for Local Government on implementation of Best Value across the State, published its second annual report in December 2002.

Legislative review

Update of the Local Government Act 1989 was prorogued due to the November 2002 Victorian State election. It is now expected to be debated in the Spring 2003 Parliamentary session.

The Local Government (Update) Bill will amend the Local Government Act 1989 to reflect contemporary thinking about the role of local government. The proposed legislative changes address:

  • council codes of conduct
  • disclosure of conflicts of interest
  • transparent decision making
  • sound financial management
  • accountable public reporting
  • democratic electoral systems
  • the role and charter of local government.

National Competition Policy - Local Government Improvement Incentive Program

In November 2002, the Victorian Government announced the introduction of a Local Government Improvement Incentive Program to replace the system of National Competition Policy payments to councils. New agreements will be sought between the Victorian Government and individual councils, to take effect from 1 July 2003. Consultation with the sector was undertaken during early 2003.

Compliance for 2002-03 is based on three components:

  • National Competition Policy (trade practices, local laws and competitive neutrality)
  • best value
  • asset management.


The Local Government and Regional Services Division has maintained its focus on local infrastructure asset management in the local government sector. A number of projects are under way which aim to improve knowledge and skills within the sector regarding infrastructure asset management. These include development of a methodology and web-based data collection and reporting tool for the sector to monitor improvements in their asset management over time, and knowledge and skills development.

Comparable performance measures

During 2002-03, Victoria continued a number of performance management projects and publications, and also delivered a project aimed at building the performance management capacity of the sector.

Each local government reported 11 indicators in the report of operations section of their annual reports for 2001-02, and submitted them to the Local Government and Regional Services Division. The indicators cover rates, operating and capital expenditure, debt, community satisfaction, infrastructure and governance. The Local Government in Victoria 2002 report was released in February 2003. It provided commentary on State-wide indicator results, including analysis by local government type (that is, inner metropolitan, outer metropolitan, regional cities, small shires and large shires).

It also included individual local government results in an attachment. The report can be downloaded from www.dvc.vic.gov.au/web20/dvclgv.nsf under publications.

The annual Community Satisfaction Survey was undertaken in early 2003, with 78 out of 79 local governments participating on a voluntary basis. The overall performance of local governments has stabilised since the survey began in 1998.

This year, 79 per cent of respondents reported 'excellent, good and adequate' in 2003 compared with 78 per cent in 2002. At a State-wide level, two areas - town planning policy and approvals, and community engagement - have shown some decline. As in previous survey years, metropolitan respondents were generally more satisfied than country respondents. Nevertheless, there were a number of measures where country local governments achieved higher ratings than metropolitan local governments (including customer service, health and human services and the appearance of public areas).

In addition to the two indicator projects described above, the Division has also delivered a project aimed at improving the capacity of local governments to measure and manage their performance. The Division engaged a consultancy firm to research current performance management practices within the sector, and deliver a seminar to the sector promoting good practice in performance management.

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Department of Local Government and Planning

Microeconomic reform

Under the Local Government Act 1993, the largest 18 councils in Queensland (the big 18) were required to consider some form of National Competition Policy reform for their significant business activities. The remaining 107 councils were encouraged to consider the reforms on the basis of good management.

The National Competition Policy Local Government Financial Incentive Package is a pool of funds, totalling $150 million (in 1994-95 dollars), that the Queensland Government has allocated as a significant incentive for local government to implement National Competition and related Council of Australian Governments water reforms.

The funds also recognise costs to local government of reviewing their business activities and local laws and implementing such reforms.

Given the importance of local government infrastructure and facilities to overall State development, implementation of National Competition Policy reforms by councils (where the benefits outweigh the costs) also contribute to economic and social development at State and regional levels.

The big 18 were originally selected for the primary focus of reform on the basis that their significant business activities (Type 1 and Type 2 activities) accounted for around 80 per cent of local government business expenditure in Queensland. Only these councils were required to undertake public benefit assessments before deciding which competitive neutrality reforms should be applied. Additionally, all local governments were invited to identify their Type 3 business activities (that is, non-significant) and determine whether to apply full cost pricing, code of competitive conduct, commercialisation or corporatisation reforms. Although the nomination of Type 3 business activities was not mandatory, 40 councils nominated Type 3 activities for reform at the outset of the reform program.

Nominations for new business activities for National Competition Policy under the Financial Incentive Package closed on 30 March 2002, by which time 736 nominations had been received.

Councils must first nominate a business for reform and resolve to apply the specific reforms. Once a council's business nominations have been accepted, they must undertake a series of reforms to be eligible for payments out of the Financial Incentive Package.

The original date for completing National Competition Policy reforms was 30 June 2002. However, the guidelines were amended to provide an extension to allow all councils to gain the greatest benefit from the Business Management Assistance Program (see below). For councils that met the new guideline requirements, the deadline for implementing reforms to be eligible for Financial Incentive Package payments was extended to 30 June 2003. Of the 124 eligible councils, 117 have sought and been granted an extension. In addition, in this last round, 223 new business activities were nominated across 85 councils - 15 were nominated by the big 18.

In compiling its assessments against the Financial Incentive Package Implementation Pool for the year ending 31 July 2002, the Queensland Competition Authority commented that good progress continues to be made with the big 18 achieving an average reform level of 77.7 per cent. The remaining 106 councils have made more progress than in previous years and have reached an average reform level of 54 per cent. The payments to the 106 smaller councils in June 2003, as a result of reform progress at 30 June 2002, has illustrated the success of the State government funded Business Management Program in which 117 councils have participated.

The Queensland Government's position on applying the National Competition Policy reforms to local government has always been that they are a set of management tools to choose from if they are going to benefit a council and there is a positive public outcome.

Apart from providing funds under the Financial Incentive Package, there have been a number of initiatives in recent times to support local governments implementing National Competition Policy reforms, for example, training and development of guidelines for dealing with competitive neutrality complaints in local governments.

The $150 million allocation of the Financial Incentive Package has three components, namely:

  • $1 million in a training pool to provide National Competition Policy training and assistance to local governments by the Local Government Association of Queensland and the Department.
  • $7.5 million in a review pool to help local governments meet the cost of reviews of local laws, to conduct public benefit assessments of the impacts of introducing competitive neutrality reforms and assessments of the cost effectiveness of introducing two-part tariffs under the Council of Australian Governments water reforms.
  • $141.5 million in an implementation pool to be paid to local governments for implementing National Competition Policy reforms.

Of the $150 million, $45 million (in 1994-95 dollars) has been set aside for Brisbane City Council, made up of $2.25 million from the review pool (which has been fully expended) and $42.75 million from the implementation pool. This allocation was based on a variety of characteristics, such as recurrent expenditure, revenue and population, all of which suggested that an amount in the vicinity of 30 per cent of the funding pools would be appropriate.

Payments have been made to local governments over six years, commencing in 1997-98, with the total amount under the Financial Incentive Package subject to Queensland receiving the full amount of its competition payments from the Commonwealth. The figures below indicate the funds distributed to-date and the funds remaining (including indexation).

Table G.1 Local government National Competition Policy Financial Incentive Package, actual payments to local government from review and implementation pool, including indexation1

Payment ($m)



Note: 1 Indexation determined by the Commonwealth based on population changes and CPI.

In each of the six years of distributions to date, unspent funds were carried forward, increasing the potential funds for distribution in subsequent financial years.

The payments to local governments in 2002-03 comprised $20.2 million from the implementation pool to 117 local governments recognising their progress in implementing National Competition Policy and Council of Australian Governments water reforms.

The remaining funds in each of the three pools of the Financial Incentive Package are as follows:

  • training pool - unexpended funds in this Pool were supplemented in 2001-02 to finance the $600 000 Business Management Assistance Program - $72 106 remains unexpended under this Program
  • review pool - of the available $8.255 million, only $635 100 remains undistributed
  • implementation pool - an estimated amount of $28.5 remains available. There will be no further payments to the Brisbane City Council as its deadline for reform implementation was 30 June 2002 or to six other councils who did not apply for an extension to 30 June 2003 to implement their reforms. There will be one further round of annual payments to other local governments to be made late in 2003-04 based on their reform progress as at 30 June 2003.

Business Management Assistance Program

In August 2001, the State government provided funding to establish the Business Management Assistance Program to improve councils' financial management capability and hence enhance their general capacity to provide services to their communities, while maximising their potential for payments through the Financial Incentive Package. The Local Government Association of Queensland has implemented the initiative (in consultation with the Department of Local Government and Planning and Treasury). $0.6 million from the indexation component of competition payments allocated to the Financial Incentive Package was used to fund the initiative.

As part of Business Management Assistance Program, consultants worked with the 107 participating councils to develop action plans outlining a program for implementing the remaining National Competition Policy reforms in the required time. Support has been provided in implementing the National Competition Policy requirements that also result in improved financial management practices for the councils, and improved outcomes for their communities. This support has enabled them to maximise their potential payments from the State government under the Financial Incentive Package.

Progress in developing comparable performance indicators

Under its performance management program for local governments, the Queensland Department of Local Government and Planning is committed to helping local governments achieve performance improvement and best practice in the services they provide to their communities.

In May 2003, the Department released its 5th comparative performance report, Queensland Local Government Comparative Information 2001-02, produced in partnership with local governments. The report provides a comprehensive collection of performance and contextual information for key local government functions, such as road maintenance, water, sewerage, waste management, library services, local government rating and financial management.

The report aims to help local governments develop new and more effective ways to deliver their services by providing an effective tool by which local governments can monitor trends and benchmark their performance both internally and with other councils.

With the publication also available freely on the Department's web site, at www1.dlgp.qld.gov.au/estore/local_govt/, community members also have greater access to the comparative information. In so doing, the report helps enhance Queensland local government transparency and public accountability.

Accompanying the release of this year's report was the release of the data analysis and reporting software program, Viewdata, which is based on the comparative information published in the report. Viewdata enables local governments to analyse, compare, report and benchmark their performance against any other council or group of councils in Queensland.

During 2003-04, the Department intends to introduce initiatives which will further promote local government use of comparative performance information, particularly its integration with councils' corporate and operational planning processes.

Local Government Association of Queensland

National Competition Implementation Grant

To help members implement National Competition Policy reforms, and to maximise local government access to the Financial Incentive Package implementation pool, the Association created the Business Management Assistance Program. The program was a broad-based assistance package designed not only to assist members with National Competition Policy reform, but also provide guidance on other aspects of councils' business and financial activities. The aim was to improve councils' capacity and enhance their effectiveness in providing services to their communities.

Most Queensland councils have made great progress with the program of structural reform and application of the Competitive Code of Conduct and Council of Australian Governments water reforms. The Business Management Assistance Program process involved desktop reviews and personal contact by experts for each participating council followed by close assistance with development of individual council programs to achieve established performance milestones. Each council has been supported in a mentoring program, to ensure the reform process remains on track.

Councils benefitted financially through the Financial Incentives Package but more importantly, in the reviewed business activities at least, have achieved long-term operation and service delivery benefits through improved management practices within the council.

Valuation, revenue and rates

As a result of requests from member councils for more assistance in the areas of valuations, rates and revenue, changes to relevant legislation and developments in differential general rating mechanisms within local government, the Valuation, Rates and Revenue Conference was held in Brisbane in November 2002.

The conference covered the major topics of valuation reform (which the Department of Natural Resources and Mines has subsequently put on hold), a workshop/panel session on differential general rating, and update on new amendments to the Local Government Act 1993 affecting fees and charges. The conference was well attended and highly praised as meeting the needs of member councils.

Social capital project

The Local Government Association of Queensland, in conjunction with the University of Queensland and five local government communities, has started a social capital project. The research methodology includes community engagement techniques and will identify the potential for councils to engage in social capital building and community leadership.

The project will include skills transfer provided through a documented feedback and evaluation process. Councils will be able to develop future training using the project results. It is expected that, as a result of the project, planning and consultation for effective communities will be enhanced.

Active consideration of community issues through good governance

Queensland local governments are embarking on a new era of governance by consciously widening the scope of works from servicing land to servicing people. This has provided opportunities for Queensland local government to include consultation with and give consideration to issues relating to youth, the aged, and multiculturalism in the community when making local decisions. The move to a broader consultation base has helped local government deliver tailored and effective services within their specific geographic and demographic areas.

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Western Australia

Department of Local Government and Regional Development

The department provided a wide range of programs all of which were intended to improve the efficiency and effectiveness of local governments. Major programs this year were:

  • The department continued to provide advice to local governments and individual elected members and senior staff about interpretation of legislation and operational procedures.
  • The Financial Management Award program continued with appropriate recognition given to those local governments that demonstrated their skills in this area. Award winners are encouraged to mentor other local governments so the skill base can be spread around the State.
  • The Chief Executive Officer Support Program, which has been running successfully for nearly 10 years, supported about eight new local government chief executive officers.
  • Guidelines about complex and difficult operational areas continue to be prepared. A notable guideline for 2002-03 was about councils providing public question time.
  • The department works with the Western Australian Local Government Association and Local Government Managers Australia to provide a peer support program whereby councils whose performance is being damaged by inter-personal conflict can benefit from mediation and advice from their peers in the sector.
  • Many rural local governments are becoming more aware that they are going to have to work with surrounding councils to achieve many of their objectives. The best way to achieve cooperation is through a voluntary regional organisation of councils. The department made some grants available to encourage councils to get together to assess the value of establishing voluntary regional organisations.
  • Councils and individuals can make mistakes which often result in inquiries. It is important for all other local governments to learn from the mistakes of other councils and so, at the end of every major inquiry, the department releases a report outlining the lessons that other local governments can learn.
  • Elected members need to become better informed and educated about their role. To this end there are 14 training modules available for elected members in Western Australian local government. In addition, after the May 2003 elections the department provided a training program called 'Getting Started' specifically for all newly-elected members in local government. It was very successful with a high proportion of newly-elected councillors attending.
  • Before the May 2003 local government elections the department and the Western Australian Local Government Association ran a strong joint campaign to encourage a greater number of candidates and voters.

Comparable performance measures

The department continues to address the issue of comparable performance indicators. However, obtaining reasonably reliable data from local governments has proven difficult.

The concept of using Internet technology to facilitate data collections was explored. It was envisaged that this would lower collection costs, improve data quality and enhance collection timeliness. However, this technology has proved technically impractical at this time due to a variety of hardware, software, funding and other issues. An inaugural joint data collection effort by the department, the Grants Commission and the Australian Bureau of Statistics, aimed at reducing provider workload for local governments, also failed to achieve the desired benefits in relation to data completeness, quality and timeliness.

Consideration of the issues associated with data quality and timeliness continues with a view to finding a cost effective solution.

Western Australian Local Government Association


The Association, in conjunction with the Heritage Council of Western Australia and StateWest Credit Society, has developed the Heritage Loan Scheme whereby owners of properties listed on Local Government Municipal Inventories can apply for subsidised loans of between $5000 and $50 000 to undergo heritage conservation works of their properties. The Scheme offers a perfect opportunity for local governments to promote the value of heritage at the local level.


The Perth Biodiversity Project is a major local government initiative to promote the long-term protection and management of natural areas in the Perth metropolitan region. It is a partnership project between the Western Australian Local Government Association, the Natural Heritage Trust, the Department of Planning and Infrastructure and Perth's 30 metropolitan local governments. Since 2001, the project has supported investment of over $1 million in 42 local government biodiversity conservation projects.

The Association has continued to work to increase local government's capacity to incorporate sustainability objectives into their operations. The State Government has developed a State Sustainability Strategy and in the development of this policy document the Association arranged a series of forums whereby State and local government representatives could discuss sustainability related issues and develop appropriate actions. It is anticipated that a Partnership Agreement will be signed between State and local government in order to formalise the relationship on sustainability and provide a mechanism for the pursuit of the relevant recommendation of the State Sustainability Strategy.

It is recognised that larger gains in this area could be achieved if the Association had resources dedicated to working with local governments on sustainability. Accordingly funding is being pursued from State Government grant streams and private organisations to assist with this reform agenda item.

Commonwealth-driven changes to delivery of Natural Resource Management funding programs has provided both a challenge and opportunities for local governments. Local government involvement in Natural Resource Management under previous funding arrangements had been sporadic and less than what the Association considers appropriate, given local governments' potential to influence positive Natural Resource Management outcomes.

It is anticipated that the regional approach will highlight how local government can make a more substantial and ongoing contribution to Natural Resource Management objectives. Recognising that the onus for increasing local government involvement in Natural Resource Management rests with all stakeholders but primarily local government itself, the Association developed a project with this aim and has received funding.

This dedicated resource will build on the Association's Natural Resource Management activities to date which include:

  • involvement in the National Action Plan for Salinity and Water Quality/Natural Heritage Trust Bilateral negotiation process
  • liaison and development of regionally-based projects with some of the Natural Resource Management groups
  • general liaison with all six Natural Resource Management groups.

The Municipal Waste Advisory Council exists as the standing committee with delegated authority to represent the Western Australian Local Government Association on all matters relating to waste management.

The Municipal Waste Advisory Council is a collaboration between Regional Waste Management Councils and provides a valuable forum through which all major local government waste management players can cooperate.

During 2002-03, the Advisory Council was involved in:

  • coordinating local government applications to the Western Australian Waste Management and Recycling Fund
  • developing and managing an Information Exchange Network
  • initiating and formulating State-wide recycling and waste reduction projects and programs with local government involvement
  • researching and reviewing State and Commonwealth legislation and preparing submissions and/or responses on behalf of its membership. Included among these were:
    • Contaminated Sites Bill 2002
    • Waste Management Bill 2000
    • Western Australian State Sustainability Strategy Consultation Draft 2002
    • National Packaging Covenant
    • Container Deposit Legislation.


The Association continues to provide training and professional development to elected members through the Elected Member Development Program. Established in 1998 the Program enhances the effectiveness, leadership and development of good governance practice in local government.

Courses are scheduled every quarter through the Training and Development Calendar which is sent to all local governments, mayors and presidents. Individual local governments often asks for in-house sessions which the Association is able to deliver at approximately four sessions per month. The 13 training modules the Association developed and delivered during 2002-03 included:

  • Legal Responsibilities of an Elected Member
  • Land Use Planning
  • Performance Appraisals of the Chief Executive Officer in Local Government
  • Teamwork, Communication and Conflict in Local Government
  • Meetings
  • Strategic Planning
  • Local Government Finance
  • Community, Consultation and Participation
  • Ethics and Conduct for Elected Members
  • Change Management
  • Policy Development
  • Regions and Resource Sharing
  • Customer Service and Complaints Handling.

The Association delivered the highly successful new induction module 'Getting Started' to newly-elected members. Its purpose is to provide newly-elected members with basic knowledge and skills to enable them to start their career in local government in an informed and confident way.

It also provided an excellent opportunity for current elected members to refresh their skills.


The Linking Councils and Communities project has been designed to help Western Australian local governments develop online service capability in a strategic, coordinated and cost effective way. Using funding secured from the Commonwealth Networking the Nation program, a framework for delivering community-focused online services is being implemented.

The framework leverages upon aggregated demand using a 'shared services' model to provide the enabling tools and infrastructure that otherwise may not be available, or economically viable, for individual councils, particularly in rural, regional and remote areas.

The main goal of the project is to extend and enhance the services councils deliver to their communities and for councils to realise potential productivity gains through resource sharing and online services delivery.

The project is designed to address council needs in developing and implementing a sustainable online environment. To achieve the objectives of the Linking Councils and Communities project, several sub-projects have been developed that provide the framework and infrastructure to support the project. Key sub-project areas include:

  • Education and Training - provides knowledge required to deliver online services.
  • Internet and Extranet Enablement - provides online services functionality.
  • Online Billing - provides ability to accept electronic payments via the Internet.
  • eProcurement - provides the ability to purchase supplies using Internet tools and technologies.
  • Geographic Information System - provides spatial data mapping applications.
  • Telecommunications Infrastructure - provides connection to the Internet to deliver online services.

The key achievements for the Linking Councils and Communities Program in 2002-03, divided into key areas, include:

  • Internet and Extranet (Portal) Development
    • Successful delivery of awareness and information sessions, conducted with all non-metropolitan councils to inform them of the project, its objectives, and what will be delivered under the auspices of this Networking the Nation-funded project.
    • Commitment, from 104 non-metropolitan councils, to participate in the education and website planning workshops (through signing a memorandum of understanding).
    • Establishment of a 'reference group' of councils to review the training materials and delivery options for how this and other aspects of the project will be delivered across the State.
  • Facilitation of 21 regional web site planning workshops
    • Commitment, from 66 non-metropolitan councils, to participate in the project (through signing a memorandum of agreement).
    • Launch of over 35 new council web sites (using a shared/common Website Content Management System).
    • Delivery of regional Website Content Management System training (Introductory) to over 40 councils, enabling councils to effectively manage their new web sites.
  • Use of a pilot reference group to:
    • identify and map councils' information and services needs to be delivered through the whole-of-local government portal
    • identify local government functions that could be aggregated and delivered via the shared services infrastructure.
  • Telecommunications Project
    • Audit of current telecommunications and Internet capability conducted to evaluate the 'current state of play' and to discover the major issues from a local government perspective.
    • Rollout of 15 pilot Linking Councils and Communities gateway PCs as part of the telecommunications sub-project.
  • Geographical Information Systems Project
    • Local government issues and requirements captured through a questionnaire designed to explore the current, and desired state, for local government Geographical Information Systems capability
    • User Requirements Specification developed from the questionnaire outcomes issued to a focus group for discussion and consideration.
    • Functional Specification created, based on the User Requirements Specification, and incorporating findings from the focus group.
    • Development of options for technical architectures and delivery models based on the Functional Specification. A business case for each model was used to assess and determine the 'best' model for implementation.
    • Discussions with both the Western Australian Land Information System and the Department of Land Information (previously Department of Land Administration) about opportunities that may exist between these parties and local government.
    • Development and piloting of a prototype (or proof of concept) Geographical Information Systems. The prototype was assessed and approved by focus group members and a number of other stakeholders.
    • Release of a request for quote seeking a technology solution provider for implementing the project.

The Linking Councils and Communities project and the various sub-projects will continue to be rolled out to all councils in Western Australia (including metropolitan councils).

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South Australia

Department of Transport and Urban Planning

The State government introduced legislation to improve the openness of, and access to, council meetings.

To improve the efficiency and effectiveness of councils' rating systems, a collaborative project between the State government and local government was undertaken to help councils model rating options, communicate rating policies and explore rate relief options.

The Local Government Association of South Australia continues to provide an extensive education and training program for council members and staff designed to keep them up-to-date with key changes to legislation and best practice in local government. In addition, the Association has undertaken a comprehensive governance project to help council members and staff better understand their governance responsibilities. The project includes a 'governance checklist' for councils to use to assess their governance performance and address areas or issues of concern.

Comparable performance measures

The Local Government Association of South Australia project on Comparative Performance Measurement has moved into its second year of reporting. The sector has adopted four measures and a series of indicators as the basis of their individual, sector-wide and regional reports.

Each council receives its own results and that of the various groupings adopted by the sector for reporting processes. The project will be evaluated next year to ensure its ongoing use and relevance to councils. In addition, some councils are using a Local Government Association-prepared 'governance checklist', for comparative performance measurement of their governance responsibilities.

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Department of Premier and Cabinet

National Competition Policy

In June 1996, as required under the Competition Principles Agreement, the former government submitted a policy application statement, called Application of National Competition Policy to Local Government to the National Competition Council. This statement was prepared in consultation with local government and provided broad guidance on how the key principles would be applied to local government.

A review of the application statement began during 2002 and is currently under way. The review is to help local government continue applying competition principles to its activities by ensuring its obligations are expressed clearly in the policy statement. Following consultation with the Local Government Association of Tasmania, a revised policy statement should be finalised by mid 2003.

Progress to date in applying competitive neutrality, prices oversight and legislation review to local government is outlined below.

Under the application statement, in applying competitive neutrality principles, local government is required to:

  • identify relevant business activities which were considered significant business activities
  • undertake public benefit assessments of the corporatisation of those business activities classified as public trading enterprises under the Australian Bureau of Statistics' Government Financial Statistics Classification, as outlined in the application statement (generally water and sewerage)
  • corporatise those public trading enterprises where a public benefit assessment indicates the benefits outweigh the costs of doing so and apply full cost attribution to all other significant business activities.

Local government provided a list of their significant business activities to which full cost attribution would apply. A peer group, established by the Local Government Association of Tasmania, reviewed these lists and provided its recommendations on 11 April 1997 to the former Treasurer. Realising the advantages that competitive neutrality could deliver in increasing the efficiency of council operations, 18 of the 29 councils decided to apply full cost attribution to all their business activities, not just those determined to be significant business activities. The majority of the remaining councils chose to apply full cost attribution to their public trading enterprises (in all cases to water and sewerage services) and road maintenance.

Councils are continuing to apply full cost attribution to their business activities in a form appropriate to their size. Importantly, the Local Government Act was amended in 1999 to require councils to report competitive neutrality costs for their significant business activities in their annual reports.

The application statement also requires establishment of a competitive neutrality complaints mechanism. This mechanism was established under the Government Prices Oversight Regulations. Under the regulations, a person who believes he or she has been adversely affected by a contravention of the competitive neutrality principles may lodge a complaint with Government Prices Oversight Commission, which has responsibility for investigating all alleged breaches of the competitive neutrality principles in Tasmania.

The application statement provided that local government monopoly, or near monopoly, providers were to be brought under the prices oversight jurisdiction of the Government Prices Oversight Commission. As previously reported, the Government Prices Oversight Amendment Act 1997 extended coverage of the Government Prices Oversight Act 1995 to include local government monopoly or near monopoly services.

In addition, the State's obligations under the Strategic Framework for the Efficient and Sustainable Reform of the Australian Water Industry require bulk water authorities to charge on a volumetric basis to recover all costs. These authorities are to also earn a positive real rate of return on the written-down replacement cost of their assets.

The Local Government Regulations 1994 were amended in late 2000 to require councils to incorporate, in their annual reports, a statement of plans for supply of domestic water and sufficient financial information to demonstrate that the Urban Water Pricing Guidelines for Local Government in Tasmania are being applied in relation to the supply of domestic water. The previous requirement was for a statement to appear in councils' operating plans for the forthcoming year.

Partnerships Agreement Program

State and local governments in Tasmania have forged a close working relationship through developing and implementing the Partnership Agreements Program. The program allows the two levels of government to work together to improve economic, environmental and social development at a local, regional and State-wide level.

The agreements involve negotiation of an agreed approach to a range of issues the two parties identified. The three-year agreements are not legally binding contracts but are essentially memorandums of understanding between the two levels of government.

The Partnerships Program began in 1998 with pilot agreements being negotiated with the Circular Head and Launceston City Councils. The program now includes bilateral, regional and State-wide agreements that are capable of delivering a range of strategic, cooperative and targeted programs to Tasmanian communities.

Sixteen bilateral agreements between the State government and councils have now been signed and a further five are nearing completion. More than 2000 initiatives have been included in the bilateral partnership agreements. A peak group, that includes the Premier or his representative, in most cases, a Cabinet Minister, oversees each bilateral partnership agreement. Regional agreements have also been signed with region north and the Cradle Coast Authority. A number of councils have begun negotiations on new or revised partnership agreements.

The Premier's Local Government Council oversees State-wide agreements. This council consists of the Premier as Chair and nine elected local government representatives. State-wide agreements involve issues that are relevant to all councils and they enable the government to develop a strategic whole-of-State approach.

There are four completed State-wide agreements, on waste management, simplifying planning schemes, consultation and communication and financial relations between State and local government.

The Partnerships Agreement Program is linked to Tasmania Together - the 20-year social, environmental and economic plan for Tasmania. Agreements provide a way of delivering strategic programs to help implement Tasmania Together benchmarks at the local level. Bilateral agreements are also linked to individual councils' strategic plans.

The Partnership Agreement Program has proven extremely successful. It has attracted attention from other States and Territories, as well as from overseas.

The cooperative relationship between State and local government in Tasmania was further strengthened recently with the signing of a State-wide partnership agreement to reform the financial relations between the two levels of government. Developed through the Premier's Local Government Council, the agreement was signed by the Premier of Tasmania, the Hon. Jim Bacon MHA and the President of the Local Government Association of Tasmania, Cr Lynn Mason. Under the reform package, the State government has agreed to pay council rates on Crown land, apart from certain types of reserves, and Hydro generating assets and related infrastructure. Councils will now be required to pay State taxes, including payroll and land tax, with similar exemptions. $10 million worth of levies on local government will also be abolished. The net result is that local government stands to benefit by almost $4 million a year from the start of the reforms in July 2004.

This is the first time this kind of reform has been achieved in any Australian State.

More information on partnership agreements can be found at www.dpac.tas.gov.au/divisions/lgo/

Review of the Local Government Act 1993

The Tasmanian Government is reviewing the Local Government Act 1993. The objective of the review is to update the Act to ensure it promotes the best local government practices, meets the needs of local communities and reflects the goals of Tasmania Together.

In January 2003, the Minister established a steering committee to provide the government with guidance on the overall strategic direction to be taken in relation to the review. The membership of the steering committee includes representatives of the community, local government and the State government. This committee is also responsible for recommending amendments to the Minister. The government will then decide which recommendations it will take to Parliament.

The first phase of public consultation was undertaken in March and April 2003. It included the release of an issues paper, nine regional workshops and an invitation to make written submissions suggesting amendments to the Act. Over 100 written submissions were received from a variety of sources, including community members, ratepayer and progress associations, State agencies, industry groups, councils and individual Councillors.

The results were:

  • 330 amendment proposals and issues were raised for consideration as part of the review
  • community members raised approximately 64 (19%)
  • local government raised approximately 150 (45%)
  • approximately 95 (29%) came from State agencies, including the Local Government Division
  • the Local Government Board raised 19 proposals (6%).

The steering committee established three working groups - governance, accountability, and council administration and operations and revenue and financial management. The working groups researched issues the review raised and provided recommendations to the steering committee on ways to resolve the issues. The working groups met between April and July 2003.

The working groups include representatives of the community, industry organisations, local government and State government. The project manager is a member of each working group.

The government has indicated its preference that any amendment legislation be presented to Parliament in the Autumn session in 2004. The steering committee is currently undertaking the second phase of public consultation with a report on the working groups' findings and recommendations. It will make its recommendations to the Minister in October 2003.

Treatment of local government by-laws

The Local Government Division of the Department of Premier and Cabinet has implemented procedures for reviewing all proposed or existing council by-laws to ensure any restrictions on competition are fully justified in the public benefit.

The By-Law Making Procedures Manual was released in August 1997 and represents the by-law component of the government's Legislation Review Program. All by-laws proposed since that date have been required to comply with the new procedures. These procedures were formalised in 1999 with an amendment to the Local Government Act 1993 to require any new by-laws with a significant impact on the community to be subject to a regulatory impact statement.

Under the former Local Government Act 1962 all by-laws made under that Act expired on 17 January 1999. An extension of the expiry date to 31 March 1999 was legislated for as some councils had had trouble meeting the prior deadline. This resulted in the automatic expiry, at the end of March 1999, of the remaining by-laws (approximately 500).

These deadlines ensured all councils progressively reviewed their need for by-laws, and a number were subsequently repealed. As a result there has been a continued rationalisation in the overall number and content of by-laws.

Since the current Local Government Act commenced in January 1994, all new by-laws gazetted (approximately 140) have been subjected to the legislation review processes. Councils are now carefully considering the subject matter they wish to include in by-laws.

Under the Local Government Act 1993, a by-law expires eight years after it has been made. This provision has required councils to review their by-laws on a regular basis and to focus on governance arrangements and comply with National Competition Policy principles. For example, the Legislation Review Program review of the Local Government (Highways) Act 1982 recommended that the by-law making power in that Act be removed, along with certain anti-competitive elements. This was effected through the Local Government (Highways) Amendment Bill 2001 which received Royal Assent on 17 December 2001. Consequently, any by-laws that rely on the Act for their authority have now ceased to have effect. A council that identifies a need to have a by-law to control standards of highway construction now has to prepare a new by-law under the more rigorous review and consultation provisions of the Local Government Act 1993.

In 2002-03 the Local Government Division established the first database of all current Tasmanian by-laws. Councils have found this facility useful when developing their own by-laws and the Tasmanian community can, for the first time, check by-laws across the State.

The by-law database can be found at www.dpac.tas.gov.au/divisions/lgo/

Progress in developing performance indicators

The aim of the Tasmanian Measuring Council Performance Project is to provide a comprehensive framework of key performance indicators for Tasmanian local government.

The key performance indicators provide an industry-wide framework for measuring and comparing councils' performance. The key performance indicators promote:

  • enhanced performance measurement by councils
  • benchmarking and identification of best practice
  • improved accountability to the community
  • establishing performance trends over time.

The framework provides councils, individually and collectively, with:

  • practical tools to measure and compare results against agreed performance outcomes and best practice standards
  • targets and strategies for councils to continuously innovate and improve the performance of their functions, including efficient and effective service provision and operations
  • synergies to expand councils' capacities to produce better economic, social and environmental outcomes for residents and the community.

The Australian Government provided a grant of $55 000 under the Local Government Incentive Program to help implement the performance measurement system. This funding finishes on 31 December 2003. A key performance indicator steering committee, comprising State and local government officers and the chairperson of the Local Government Board, was established to oversee introduction of the performance measurement system for Tasmanian councils.

The steering committee has refined the performance indicators developed in 1999. Council performance was measured by 50 key performance indicators in the 2001-02 report. All 29 Tasmanian councils provided their data on a voluntary basis for the 1999-2000, 2000-01, and 2001-02 reports. The report for 2001-02 was released on 3 July 2003.

The project has been, and will continue to be, a joint effort of both State and local government. There is strong local government support for the measurement system.

The State government, through its initiative funding, has allocated sufficient resources to ensure successful ongoing operation of the key performance indicator framework. The data collection form developed for the project includes not only the data for the key performance indicator project but also existing Australian Bureau of Statistics, State Grants Commission and Department of Treasury and Finance data requirements. This consolidated data collection process was used successfully for the 2000-01 and 2001-02 reports.

Customer satisfaction with council services is an important indicator. To satisfy this, the Local Government Association of Tasmania developed a community opinion survey that all councils can use and adapt for their particular requirements. The survey was run in 2001 and again in 2002. The survey was developed and carried out with funding from the Local Government Incentive Program.

The reports have proved useful for councils both for internal monitoring and in relation to their performance compared with similar councils. Both council staff and elected members have welcomed the reports.

The key performance indicator committee held a series of workshops around Tasmania in June and July 2002 to discuss aspects of data collection and analysis. These workshops were held before data collection sheets were sent to councils for the 2001-02 data. The committee used feedback from the workshops to review some of the definitions to ensure comparisons are valid over time and between jurisdictions.

With three years data, the committee has presented some of the information graphically in the 2001-02 report. As more data becomes available the committee will be considering revising its dissemination strategy and presentation of performance measures.

The reports can be found at www.dpac.tas.gov.au/divisions/lgo/

Local Government Board

The Local Government Board provides another method of assessing council performance. The board was established in 1987 under the Local Government Act 1962, and continued under the Local Government Act 1993. Its main role has been to review councils on matters such as boundaries, amalgamations, electoral districts, council names and the numbers of elected councillors.

The board's role changed when it was reconstituted in December 1998. The board has broadened the scope of general reviews to include governance and operational matters, and developed guidelines for general reviews to ensure the process is meaningful and of particular assistance to the council being reviewed.

The Act requires the board to undertake a general review of each council at least every eight years.

In each general review the board addresses:

  • boundary or name changes
  • governance
  • regulatory functions
  • community development, communication and consultation
  • equity, access and human resource management
  • asset management
  • financial matters
  • external relations and developing local government
  • public submissions.

The board also provides the council with recommendations to help it improve its performance.

The board completed five general reviews during 2002-03, a specific review of the Burnie City Council in regard to the number of aldermen, and a follow-up review of the Flinders Council.

Board reports can be found at www.dpac.tas.gov.au/divisions/lgo/

Board of Inquiry into the Kentish Council

In January 2002 the Premier, Jim Bacon MHA, received a report from the Local Government Board of Review following a series of allegations concerning elected members and staff of the Kentish Council. As the Minister responsible for local government, the Premier established a Board of Inquiry under the provisions of the Local Government Act 1993 to investigate the Kentish Council.

All Councillors were suspended and an administrator appointed to exercise the powers and perform the functions of the Councillors.

The Board of Inquiry recommended that:

  • the Minister responsible for local government dismiss all Councillors at Kentish Council pursuant to section 226 of the Local Government Act 1993
  • a plebiscite be conducted with due weight given to the matters raised in the section of this report 'Future of the Council'
  • an administrator be appointed for up to two years (section 231 of the Local Government Act 1993 provides for a one-year appointment plus a one-year extension)
  • the number of Councillors be reduced from 10 to nine to conform with the number of representatives elected to like rural councils and to prevent a hung council.

The Minister Assisting the Premier on Local Government, Mr Jim Cox, MHA, subsequently dismissed the Kentish Councillors and appointed a consultant, Mr John Gibson, to oversee development of a plebiscite proposal. The plebiscite was held in February 2003. The Kentish voters overwhelmingly (78%) voted to retain the Kentish Council in its own right.

A new Kentish Council was elected at a poll in June 2003.

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Northern Territory

Performance indicators

The Northern Territory has been collecting comparable performance indicators since 1997-98. The aim of the Northern Territory performance indicators program is to introduce performance management tools to all councils in the Territory in such a way as to ensure they become an integrated and valuable part of community management practices. In support of this aim, the Department of Local Government has linked development and implementation of performance indicators for local governing bodies to introduction of its best practice program.

While reporting of performance information is well within the capacity of the municipal and larger councils, it is recognised that the capacity to provide this information is more difficult for the smaller and remote councils. Consequently, the performance indicators program consists of two streams.

The municipal and larger councils, which comprised the first stream, collected a full set of quantitative performance information on the three identified core services - roads, waste management and community management.

The second stream, consisting of the smaller and remote councils, is less advanced.

Performance indicators highlight differences between councils for specific activities but do not explain why these differences may have occurred. For this reason contextual and descriptive information for each participating council is collected and includes explanations of the circumstances and results provided by the councils themselves.

The reports will not provide benchmarks against which to assess 'satisfactory' performance. Instead, contextual information is being provided that will help councils identify similar councils against which their performance may be assessed.

Trends in the past two years, however, have reflected an ever-increasing decline of councils' willingness to collect performance measurement data.

As a result, the Department of Community Development Sports and Cultural Affairs is starting a major review of the processes used to collect data and the performance measures themselves.

It is anticipated the review will result in:

  • an improved collection process that will be streamlined
  • a reduction of data collection duplications
  • performance measures that should be more relevant and comparable.

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Australian Capital Territory


A new Materials Recovery Facility for processing domestically collected recyclables is being constructed as a part of the first stage of developing the planned Hume Resource Recovery Estate.

A temporary No Waste Education Centre was established at Mugga Lane. The Education Centre comprises a dedicated classroom for visiting parties of school children and is also accessible to the wider community.

New kerbside contracts for collection and processing domestic recycling and garbage started in April 2003. The new services collect and process an expanded range of recyclable material.

Recyclable materials are now collected in a single-chamber bin rather than divided bins to improve ease of use by residents, increase the bin's capacity to recover a wider range of materials, and reduce the incidence of street littering.

During 2002 special bin tops were acquired and made available to public event organisers to facilitate recycling at public events. An advisory service has been established and the Guide to Recycling at Public Events was released.

Roads ACT

In 2002-03 Roads ACT continued developing road maintenance contracts and corresponding inspection and superintendence contracts for delivering planned and unplanned road maintenance works. The contracts are generally based on AUS-SPEC specifications and incorporate Roads ACT's new Standard Specification for Urban Infrastructure Works and, where relevant, Roads and Traffic Authority of New South Wales and industry specifications for maintenance works.

In January 2003 the Traffic Signal Maintenance contract was benchmarked and began with Ecowise Services. The contract is a performance based contract based on specifications similar to AUS-SPEC and covers maintenance of all traffic and pedestrian signal assets on the arterial, urban and municipal road network including high-use areas such as shopping precincts.

Exor Corporation was awarded a contract in 2003 to undertake a scoping study to refine City Management and Environment ACT's requirements for a new Integrated Asset Management System. A contract for developing the Integrated Asset Management System software will be let in the 4th quarter of 2003 with data population to begin in late 2003. The Integrated Asset Management System will allow more effective and efficient prioritising and management of local government asset maintenance through collection of location, asset type and asset condition data.

Canberra Urban Parks and Places

As the purchaser of park and public place maintenance service, Canberra Urban Parks and Places is continuing to focus on improving the efficiency and effectiveness of delivery of services by:

  • developing Asset Management Plans, including a 20-year predictive financial modelling and a specific Asset Management Plan for Urban Trees
  • developing a new customer satisfaction survey that measures customer interactions with Canberra Urban Parks and Places
  • establishing a recreation program to encourage better interaction with targeted community groups resulting in better-informed decision making
  • initiating a sustainable parks management strategy to address long-term environmental sustainability to the community.

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