City of Subiaco Submission to Metropolitan Local Government Review Panel's draft findings May 2012

City of Subiaco submission – response to key findings – May 2012 1

Table of contents

KEY FINDING ONE 4 Enhanced strategic thinking and leadership across the state and local government sector and the wider community will be required to manage the extraordinary growth of metropolitan over the next 50 years. 4 KEY FINDING TWO 5 The current local government arrangements will not provide the best outcomes for the community into the future. The status quo cannot and should not remain. 5 KEY FINDING THREE 7 There is a need for significant change in Perth’s local government, including changes in local government structures, boundaries and governance. 7 KEY FINDING FOUR 9 The panel envisages the outcome of the review to be a stronger, more effective, more capable local government sector, with an enhanced role and greater authority. 9 KEY FINDING FIVE 9 Uncertainty about the future needs to be addressed by prompt and decisive government decision making. 9 KEY FINDING SIX 11 A shared vision for the future of Perth should be developed by the state government, together with local government, stakeholder and community groups. 11 KEY FINDING SEVEN 12 A sense of place and local identity can be maintained through appropriate governance regardless of the size of a local government. 12 KEY FINDING EIGHT 13 The primary benefits to be achieved by the proposed reforms of Perth’s local government arrangements include: 13 a) increased strategic capacity across the local government sector; 13 b) a more equitable spread of resources across metropolitan Perth and more equitable delivery of services to all residents; 13 c) reduced duplication and better use of infrastructure; 13 d) a streamlined regulatory environment with greater transparency, simplicity, consistency, and certainty with attendant costs savings for all sectors of the community; 13 e) potential to achieve greater economies of scale; 13 f) increased influence with State and Commonwealth governments reflected in improved funding for community projects; 13 g) the achievement of metropolitan-wide social, economic and environmental goals 13 KEY FINDING NINE 15 The structure and governance arrangements for local government in Perth cannot be considered in isolation from the role and function of local government, and from the relationship between State government and local governments. 15

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KEY FINDING TEN 16 Some functions need to be managed from a metropolitan-wide perspective, including waste disposal and treatment, transport and planning. A shift in responsibility to the state government may be warranted. 16 KEY FINDING ELEVEN 17 Consideration should be given to establishing a Local Government Commission, comprising an independent chair and persons with significant state and local government experience, to manage the relationship between state and local government, and to oversee implementation of the reform process. 17 KEY FINDING TWELVE 18 A redefined local government would have its role enhanced including re- empowerment in local planning. 18 KEY FINDING THIRTEEN 18 The most appropriate options for local government in metropolitan Perth are: 18 a) 10 to 12 councils centred on strategic activity centres 18 b) five councils based on the central area and sub-regions. 18 c) one single metropolitan council 18 KEY FINDING FOURTEEN 22 In any future model, the size of the should be increased and its role enhanced. 22 KEY FINDING FIFTEEN 23 It is important to make significant change and create a new structure with robust boundaries to minimise the need for further debate and change in the short to medium term. 23 KEY FINDING SIXTEEN 24 Once a new structure is settled, there should be periodic boundary reviews undertaken by an independent body, to ensure the local government structure is optimal for meeting the changing needs of a growing metropolitan region. 24 KEY FINDING SEVENTEEN 24 The creation of larger local governments alone will not address all the shortcomings of the present system. 24 KEY FINDING EIGHTEEN 24 Local government’s ability to connect to the community is an important asset. In any new local government structure for metropolitan Perth, community engagement must be strengthened, to improve accountability and reduce the power of special interest groups. 24 KEY FINDING NINETEEN 25 Local government must invest in mechanisms that encourage the whole community to participate. Consideration must be given to the development of formal community engagement networks, which may include the adoption of new institutional arrangements and structures to ensure adequate community engagement and access to council. 25 KEY FINDINGS TWENTY TO TWENTY-THREE 27-28

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KEY FINDING ONE Enhanced strategic thinking and leadership across the state and local government sector and the wider community will be required to manage the extraordinary growth of metropolitan Perth over the next 50 years.

Response The general principle of enhanced strategic thinking and leadership across state and local government is supported, however the panel will need to provide evidence in its final report to show that Perth will experience 'extraordinary' growth over the next fifty years. Current projections see the resources boom peaking in 2025 – not 2062.

In other words, the panel must define what is meant by extraordinary growth in a local, state, national and international context as well as presenting the evidence to support the claim that it is a major imperative for local government reform.

As pointed out in the city's December 2011 submission to the panel, the current local governance arrangements in metropolitan Perth are very simple in terms of allocated functional roles and responsibilities. Over many decades, local government functional responsibilities – such as major roads, vehicle licensing, public transport, regional town planning, water supply, electricity supply, drainage and sewage systems – have been transferred and centralised in the state government.

Presumably this has occurred in the interests of good planning, efficiency, effectiveness and equity considerations. In other state and international jurisdictions, schools, public transport, public housing, police and education services are delivered by local governments - but not in metropolitan Perth.

The following questions are asked of the panel in anticipation that they will be addressed in the final report for the purposes of clarity and understanding.

• What are the specific issues that enhanced strategic thinking and leadership at the local level is intended to address? • Are they local or state issues and where does the political mandate to address those issues come from? • Is some new form of Swiss federalism being contemplated? • Why is the centralisation of local powers in larger units of government seen as desirable? • Is there an expectation that larger units of local governments will be able to draw upon greater technical and professional expertise from within the organisation which a properly informed council will support? • Is this not the same thinking that has seen historic local government functional responsibilities centralised in state government and where responsibility for metropolitan regional planning currently rests? • Are the issues to be addressed confined to regional planning and economic development matters, or is it intended to be much broader with the devolution of existing state functional roles and responsibilities to local governments?

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• Is the unannounced agenda one of decentralising current state government roles and functional responsibilities to local government? • Is there an expectation that larger local government units will provide regional infrastructure funded at ratepayer expense?

To sum up, the panel should demonstrate in its final report the nexus between enhanced local strategic thinking and leadership, how it would be obtained in larger and how it can be applied to the attainment of the state's metropolitan objectives.

Greater clarity of purpose is required from the panel.

KEY FINDING TWO The current local government arrangements will not provide the best outcomes for the community into the future. The status quo cannot and should not remain.

Response Any meaningful "...review of the whole structure and system..." (p.6) must include an examination of the intended role and functions of the two tiers of government - state and local.

The panel should advise the state government that an open discussion on the sharing of roles and functions between the two tiers of government is required (with community engagement) before the state government commits to any new local government structure. It is pointless building four Ferraris that end up towing thirty caravans.

It is disappointing that the academic literature supporting fragmented local governments as competitive forces for change, has been ignored by the panel. The lack of any discussion sends a message that an informed discussion is not wanted.

It is also disappointing that no evidence has been provided by the panel to substantiate the claim of a "...high level of duplication, inconsistencies and difficulties for business, lost opportunities for communities, confusion for consumers and planning that is complicated, uncoordinated and un-strategic" (p.7) under the existing local government structure.

The panel goes on to quote Charles Landry as saying that "The regulation clutter and bureaucratic spaghetti is one of the worst I have seen. It needs to be simplified - dramatically" (p.7). The panel is encouraged to analyse the origins of the regulatory clutter and bureaucratic spaghetti rather than fostering the impression that it rests entirely with local government. In our experience, it is the legislative Acts of the Western Australian Parliament that have bound and trussed local governments to the point of immobility.

To give an example, the Integrity Coordinating Group is a creation of the state government intended "... to promote and strengthen integrity in Western Australian public authorities" which includes local governments. This august body is intended to

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coordinate the regulatory clutter and bureaucratic spaghetti created by the Corruption and Crime Commission, the Information Commissioner, the Office of the Auditor General, the Public Sector Commission and the Parliamentary Commissioner for Administrative Investigations. Throw in the Department of Local Government's Local Government Standards Panel and we have six state government entities all charged with ensuring good behaviour in the affairs of local government.

It is further complicated by a tendency of the state government to introduce change for change's sake and inability to manage local issues at the local level while at the same time containing costs. As evidence, the panel need look no further than the Local Government Standards Panel and the current attempt to offload part of its functional role to the mayors of each local government.

The panel should also note that Landry's call "...to switch the thinking and internal culture..." was put forward within the context of "... rethinking and shifting the balance within the regulations and incentives regime." This applies equally to state and local government departments.

However, a switch in thinking has little to do with the size of local government units. In fact there is a strong argument that the larger and more monolithic a public bureaucracy is, the less likelihood there is of implementing needed cultural change.

One of the arguments for small local governments is their capacity to act spontaneously in response to local demands. But for the interference and 'benign' dictatorship of the state government in piling on more and more 'regulatory clutter and bureaucratic spaghetti', we could have that flexibility and creativity.

The panel has asserted that "...some local governments are performing well, but the model as a whole is unsustainable."(p.7). If that is the case, then it should be a fairly simple thing for the panel to provide the evidence. In recent times the Department of Local Government has made its own enquiries of the sustainability of each local government. That evidence (and the methodology employed) should be published in order to prove the point. It is not sufficient for the panel to make a sweeping statement without the evidence.

Proving that a new model of local governance will be sustainable for the whole of metropolitan Perth is quite a different proposition and it will also require justification in the panel's final report.

The panel points to population increase as demanding the consideration of "...what kind of local government structure would be ideally placed to meet the demands of Perth into the future"(p.7). The more pertinent question is what kind of state government structure would be ideally placed to meet the demands of Perth into the future.

Be that as it may, it is disingenuous for the panel to claim that as Perth's population grows beyond three million, it will experience more 'big city' problems and that a new form of local governance is required to tackle these problems. One can only assume that the 'big city' problems relate to such things as congestion, pollution, social segregation or high crime rates. However the Organisation for Economic Cooperation

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and Development's (OECD) 2006 report Competitive Cities in the Global Economy quite clearly indicates that these are the concerns of large metro-regions with populations in excess of five million.

When will Perth's population reach five million? The sense of urgency in dealing with population growth that the panel is attempting to engender in the broader community appears to be a wilful misrepresentation of the facts.

Even if one accepts the sense of urgency, the panel has provided no commentary on how local governments will address the big city problems of congestion, pollution, social segregation or high crime rates. Indeed, most people would consider these to be state government concerns - not local government concerns.

KEY FINDING THREE There is a need for significant change in Perth’s local government, including changes in local government structures, boundaries and governance.

Response The panel has quoted the Australian Centre for Local Government Excellence (p.7) and the Committee for Perth (p.8) as informed sources who promote the need for the consolidation of local governments. Whether they are informed sources or not is a moot point as none have provided any evidence of the need for change. The panel's final report should provide that evidence.

In between these quotes, the panel has juxtaposed (unreferenced) work of the Council of Australian Governments (COAG) as though it too, was an advocate for change in local government structures. In paraphrasing the work of COAG, the panel states (p.8):

Managing the development of cities is fundamentally about finding the right balance between economic competitiveness/productivity, maintaining a high standard of liveability, achieving long term environmental sustainability and ensuring social inclusion, recognising that there are multiple interdependencies between these goal areas.

Presumably COAG is advocating local government reform but there is nothing in the above to suggest that is the case. Indeed the COAG Reform Council in its December 2011 report entitled Review of capital city strategic planning systems (p.149) states the following in relation to planning for the Perth and regions:

Governance and context Strategic planning of the Perth and Peel regions is the responsibility of the Premier and Cabinet. Ministerial responsibility for key portfolio areas is held by the Minister for Planning supported by the Western Australian Planning Commission, the Minister for Transport, the Minister for Environment and the Minister for Lands. Local governments are responsible for making planning controls in accordance with state and regional strategic planning objectives.

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Overall views of strategic planning for Perth The council has reviewed the strategic planning system for Perth against the nine criteria by critically analysing, with the assistance of the expert advisory panel, information provided by the Western Australian Government. In doing this review, the council has reached the following high level views.

Statutory planning is strong, but strategy must lead the way The statutory underpinnings of the strategic planning system for Perth are strong and provide a good long-term foundation for the growth of the city. This includes a strong framework for integration in the Western Australian Planning Commission, and for land and corridor reservation for infrastructure and growth in the Metropolitan Planning Scheme.

The planning system for Perth has a strong overall housing and land strategy in Directions 2031, as a foundation for a strategy to shape the long-term future of Perth. However, at this stage, the plans that set out the long-term vision for Perth do not contain clear measurable outcomes or the actions to pursue those goals that form the basis for a wider planning agenda beyond simply accommodating growth.

Accountability to come The strategic planning system for Perth has limited public accountability for outcomes and for timely implementation of the actions needed to achieve those outcomes. There is a stated intention to report every five years against Directions 2031, though it is a new strategy and recent report card does not cover all areas set out in the high-level plans. Having reviewed Directions 2031, it remains unclear to the council what would be reported on and if the five-yearly review would include project milestones against initiatives or just outcomes data to adjust projections. The council understands that this is being reviewed by the state government.

Quite clearly, the Minister for Local Government has no key responsibility for the strategic planning of the Perth metropolitan area. How then can local governments be expected to make an effective contribution?

It is also worth repeating advice from COAG in relation to Directions 2031, that while the plans "...set out the long-term vision for Perth [they] do not contain clear measurable outcomes or the actions to pursue those goals that form the basis for a wider planning agenda beyond simply accommodating growth."

Further "...it remains unclear to the council what would be reported on and if the five- yearly review would include project milestones against initiatives or just outcomes data to adjust projections."

In a nutshell, it seems that while the basic planning fundamentals are good, the only decent planning strategy that the state government has is in place relates solely to the accommodation of population growth and that there are no performance measures attached to this strategy. If the strategy and the structural reform of local governments

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represent the sum total of the state's strategies intended to make Perth a competitive international city then there is a huge amount of work to be done by the state. The structural reform of local governments would seem to be a low priority.

It is understood that a new state planning strategy (to replace the now dated 1997 State Planning Strategy) has been prepared but has yet to see the light of day. It is not known whether the new state planning strategy addresses the Perth metropolitan area. Presumably it does and presumably it has something to say about the role of local governments in delivering state planning outcomes. If it doesn't, any consolidation of local governments driven by a desire to accommodate population growth, will be condemned by the community for what it is – a shallow and ill-conceived attempt to reduce the existing power of local governments.

KEY FINDING FOUR The panel envisages the outcome of the review to be a stronger, more effective, more capable local government sector, with an enhanced role and greater authority.

Response This is not a finding – rather it is wishful thinking. While the panel might well envisage the outcomes of the review as being a stronger, more effective, more capable local government sector, it cannot provide the necessary assurances.

There is very little in the way of evidence to suggest that the state government is committed to a stronger, more effective and more capable local government sector.

The Department of Local Government's introduction of the Integrated Planning and Reporting Framework initiative is the only reform initiative in recent times (i.e. since the introduction of the Local Government Act 1995) that has any merit attached to it. The Integrated Planning and Reporting Framework does not require the consolidation of local governments as a necessary pre-requisite for its implementation.

KEY FINDING FIVE Uncertainty about the future needs to be addressed by prompt and decisive government decision making.

Response In making this finding the panel argues that we are at risk of perpetuating a city characterised by:

• fragmented, divided, duplicated, ineffective governance • community disengagement • a lack of stewardship from political and business leaders

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• a governance system that does not effectively address the region’s challenges, resulting in a disjointed, polluted and congested city suffering from sprawl.

At the risk of being repetitive, fragmentation can serve the objectives of increased competition, creativity, innovation and the exercise of local democracy.

There is little division amongst metropolitan local governments. The WA Local Government Association fulfils the role of reconciling any divisions when they do appear.

Any division between the two tiers of government is largely dependent on the ability of the minister of the day and the prevailing degree of subservience the state government ascribes to local government. It is worth repeating the COAG Reform Council's observation that:

The strategic planning system for Perth has limited public accountability for outcomes and for timely implementation of the actions needed to achieve those outcomes.

That lack of accountability appears to manifest itself in other activities undertaken by the state government – not the least being local government structural reform.

In relation to duplication, the City of Subiaco advised the panel in its 2011 submission that:

Despite supposed annual savings of between $3.1m and $4.5m in operating costs through a potential amalgamation of the cities Nedlands and Subiaco, both communities have rejected such an amalgamation in the interests of retaining their independence. The dollar values in fact put a minimum premium on how much the two local governments are prepared to forego in terms of retaining their independence.

Quite clearly, duplication is a cost that both the Nedlands and Subiaco communities are prepared to pay in order to retain local democracy.

The panel has yet to demonstrate that the current local governance system is ineffective. In fact there is an argument that local government is too effective and that the current reform agenda is all about reducing the power of local government and the exercise of local democracy.

If there is community disengagement then presumably it would be evidenced by a prolonged downwards trend in local government voting turnouts. Has the panel any evidence of such a trend?

The stewardship of local governments has never been an issue – hidebound as we are by the regulatory clutter and bureaucratic spaghetti that spills over from state government.

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The assertion that local governments can be held accountable for a disjointed, polluted and congested city suffering from urban sprawl is rejected. These are big city problems (5 million people and above) and Perth is not a big city and unlikely to be so for many decades. More importantly, and as the COAG Reform Council has pointed out in December last year:

Strategic planning of the Perth and Peel regions is the responsibility of the Premier and Cabinet. Ministerial responsibility for key portfolio areas is held by the Minister for Planning supported by the Western Australian Planning Commission, the Minister for Transport, the Minister for Environment and the Minister for Lands. Local governments are responsible for making planning controls in accordance with state and regional strategic planning objectives.

The fact that we do not have a current state planning strategy that deals with the Perth metropolitan area is a matter for the state government to address – ideally in collaboration with the local government sector, if it is willing to bring to bear greater public accountability.

KEY FINDING SIX A shared vision for the future of Perth should be developed by the state government, together with local government, stakeholder and community groups.

Response The panel says that it surprised by the lack of an overarching community vision for the Perth metropolitan area (p.9). So are we.

The City of Subiaco supports the argument that a hierarchy of visions is required i.e. 1. A vision for 2. A vision for local government 3. A vision for metropolitan Perth

Presumably, the new state planning strategy, which has yet to be made public, contains one or more visions. Although not relevant to the panel's findings, it begs the question – what sort of stakeholder consultation (i.e. shared visioning) has occurred in the preparation of the new state planning strategy.

A diversity of visions is not a bad thing. They reflect local diversity which is a good thing. Would the panel argue that the vision of the University of Notre Dame should be the same as the vision of the University of Western Australia? Should the Broome campus of Notre Dame have the same vision as the Albany campus of UWA?

In terms of good governance, the planning imperative is not one of homogenising many and varied visions. Rather it is one of ensuring that the visions are complementary rather than divisive.

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The panel may also want to reflect on the following findings from the 2006 report of the OECD report on Competitive Cities in the Global Economy (p.11):

Most metropolitan governance arrangements do not address a long term strategy. Most of the existing formal models tend to respond to the lack of co- operation among local jurisdictions by focussing on improved economies of scale, reducing fiscal competition and disparities and internalising territorial spillovers within the area. The metropolitan model and amalgamation hold out the promise of increasing the political power of the metropolitan region, vis-à-vis the central government and internationally, but do not necessarily have the capacity to mobilise all stakeholders around a common strategic vision. The easiest form of inter-municipal co-operation, over single services, threatens to lose sight of the general concerns of the region, which are fundamental to the idea of a strategic vision. Lighter and more informal forms of governance generally tend to better mobilise metropolitan-wide stakeholders around a common vision, but the implementation then requires an action plan and a critical mass of financing that might need a more formal arena for co-operation or collaborative tools.

Public support and legitimacy will determine the success of a reform. Most often the creation of a new body has been made possible thanks to strong leadership by a charismatic and influential individual and/or area-wide coalition (e.g., non-government organisations, private sector). The process that preceded, and would be followed, to establish legitimacy of a new structure is also crucial to stabilise any new structures. Models that are imposed or lead to confrontation could well undermine the reform (e.g., the vote in a referendum in Amsterdam to reject plans for a merger) or undermine the stability of the new structures (e.g., de-merger movements in Montreal). Others, such as flexible forms of co- operation, are controversial as they have only indirect forms of representation but important funding responsibilities and sometimes taxing power (e.g., French Urban Communities).

KEY FINDING SEVEN A sense of place and local identity can be maintained through appropriate governance regardless of the size of a local government.

Response The panel believes that a sense of place and a sense of identity will not be threatened by local government reform (p.10):

For example, urban villages like Leederville, Subiaco and Mount Lawley will retain their character. Identity and history would remain regardless of which local government is responsible for managing the locality.

This finding is highly debatable. One of the biggest fears of Subiaco residents is that the form of commercial and office development that can be found in West Perth (which has largely obliterated its remaining stock of single residential buildings) will find its way into Subiaco should an amalgamation eventuate with the City of Perth.

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Some would argue that good town planning practices and place management will hold the tide of office and commercial redevelopment at bay, however, no assurances can be given in that regard. Assuming that a larger unit of local government based on the City of Perth is created and it includes the suburb of Subiaco, Subiaco residents may find themselves being asked to carry more office and commercial redevelopment at the expense of their heritage housing and for the sake of: • relieving inner-city development pressures • ensuring 'equity' in the distribution of office and commercial redevelopment • meeting state economic development imperatives.

As the West Perth experience shows, larger units of local government do not make better decisions. It is naive to think otherwise.

It should be recognised that bureaucracies (and elected members to a lesser extent) will always tend towards standardisation in their search for: • improved economies of scale • the elimination of disparities amongst competing groups of residents • the internalisation of negative territorial spill-over effects (e.g. indiscriminate car parking).

With that standardisation comes the loss of diversity, identity and a sense of place.

As to whether the concern is real or imagined, the panel is invited to test its claim of a disassociation between local identity and local government by polling residents in two of the largest and smallest western suburbs local governments – Subiaco and Peppermint Grove.

KEY FINDING EIGHT The primary benefits to be achieved by the proposed reforms of Perth’s local government arrangements include: a) increased strategic capacity across the local government sector; b) a more equitable spread of resources across metropolitan Perth and more equitable delivery of services to all residents; c) reduced duplication and better use of infrastructure; d) a streamlined regulatory environment with greater transparency, simplicity, consistency, and certainty with attendant costs savings for all sectors of the community; e) potential to achieve greater economies of scale; f) increased influence with State and Commonwealth governments reflected in improved funding for community projects; g) the achievement of metropolitan-wide social, economic and environmental goals.

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Response A number of the listed benefits are currently outside the remit of local government.

In relation to equity concerns, the panel has asserted that the creation of larger local governments would provide an opportunity for a more equitable spread of financial resources across the metropolitan area which in turn, would lead to greater equity in the provision of services to all metropolitan residents (p.9). No evidence is provided to support this assertion, other than to point to rating disparities between the and the .

If the argument is to be advanced in the final report of the panel, then an analysis of the impact of the effect of rating disparities is required. Are the City of Armadale residents much the worse off than their City of Belmont counterparts? Do the rating disparities manifest themselves in any socio-economic index of disadvantage? What does it mean in terms of the average household rate bill for each local government assuming that we are comparing apples with apples rather than apples with oranges? Do any differences matter?

Presumably City of Armadale residents are moving to the City of Belmont because of the residential rates advantage to be gained there – is that true?

It seems that most scholars see property tax (rates) as a particularly ineffective tool in redressing equity concerns. Equity concerns are best addressed through redistributive transfers (grants) from the higher tiers of government. Amalgamations will not address the failings of the current grant system.

The panel's reduced duplication argument relies on "... experience elsewhere in WA and Queensland ... [showing] ... an increase in the number of local government employees dealing directly with the community...", however no evidence is produced. In fact, the amalgamation of and Greenough suggests that staff numbers and the total wage bill increased in areas (strategic rather than operational) that did not deal directly with the community.

As stated previously, despite supposed annual savings of between $3.1m and $4.5m in operating costs through a potential amalgamation of the cities Nedlands and Subiaco, both communities rejected such an amalgamation in the interests of retaining their independence. In fact, the dollar values put a minimum premium on how much the two local governments are prepared to forego in terms of retaining their independence and local democracy.

The panel claims that streamlining the regulatory involvement will produce savings but is completely silent on the costs. Why? Is there any evidence that points to the supposed savings outweighing the costs?

As often repeated, Western Australian local governments are a creature of the state. If it is the Health Act 1911, the Local Government Act 1995, Planning and Development Act 2005 or the Building Act 2011 and subsidiary legislation that is creating the grief, then it is entirely within the power of the state government to enact amending legislation to standardise the local government regulatory environment.

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Some explanation by the panel as to why this is not achievable or warranted is required.

Somewhat disappointingly, the panel has confused economies of scale with economies of scope by inappropriately quoting Aulich et. al. on economies of scope in the midst of a discussion on economies of scale (p.13). In the same document that the panel quotes, Aulich et. al. states:

...there is little evidence that amalgamation will of itself yield economies of scale greater than those achievable through other forms of consolidation, or that such economies are available across many of local government’s functions by whatever means.

This is the very point that the panel attempts to downplay in its discussion on economies of scale.

The lack of understanding seriously undermines the credibility of the panel's findings.

Worse still, it suggests a biased selectivity in referencing the work of others to support a predetermined outcome. Hopefully the panel will address this issues in its final report.

The panel sees local government amalgamation as potentially increasing the sector's influence with state and federal governments, which could be reflected in improved funding. This is not a certainty.

If it is to be believed, then the politicisation of local government would appear to be inevitable. The panel is asked to consider the morality of trading off local democracy in exchange for government favours. Is it a fair transaction if one class of local governments is disadvantaged by another?

The panel is also asked to note that metropolitan-wide goals can be achieved by other means than simple amalgamation e.g. region wide bodies.

KEY FINDING NINE The structure and governance arrangements for local government in Perth cannot be considered in isolation from the role and function of local government, and from the relationship between State government and local governments.

Response The City of Subiaco supports this finding and in particular, the statement at page 15 of the draft findings which reads:

While any state government will have valid reasons for making policy decisions from time to time which impact on local government, with a restructured local government sector it is essential that in the future there be a new respect and partnership approach to governing Perth.

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In fact we would take the sentiment one step further. Whatever happens, it is essential that in the future there be a new respect and partnership approach to governing Perth.

KEY FINDING TEN Some functions need to be managed from a metropolitan-wide perspective, including waste disposal and treatment, transport and planning. A shift in responsibility to the state government may be warranted.

Response As a thorough analysis of service delivery has not been undertaken by the panel, this finding represents a missed opportunity to discuss centralised versus decentralised operations and associated decision making.

As stated earlier under draft finding 1, over many decades local government functional responsibilities – such as major roads, vehicle licensing, public transport, regional town planning, water supply, electricity supply, drainage and sewage systems – have been transferred and centralised in the state government. Presumably this has occurred in the interests of good planning, efficiency, effectiveness and equity considerations.

Arguably, it is an engrained habit of Western Australian governance to transfer difficult resource allocation and redistributive decisions up to higher levels of government (centralisation). The problem that arises with centralisation (and indeed with larger units of local government) is one of “mission creep”.

As evidence, the levy placed on private parking bays within the City of Perth to fund the Central Area Transit Scheme (CATS bus service) and other sustainable transport initiatives is now being applied to the widening of the Graham Farmer Freeway – which most people would not rate as a sustainable transport initiative. This is a perfect example of mission creep.

The waste levy that local governments collect, presumably for waste reduction initiatives, is now subsidising the operations of the Department of Environment and Conservation. When considering the introduction of the waste levy, the local government sector had no understanding that the funds it collected would be redirected to that purpose.

Vehicle licence fees were largely intended to fund road construction and maintenance activities, but any transparency and accountability regarding the use of those funds has long gone.

In short, our tendency to embrace state or regional solutions to thorny issues does not necessarily result in an optimal solution. Rather it can create suboptimal solutions as recent inquiries into state government bushfire management activities would demonstrate. Shifts in responsibility to the state government may not be warranted.

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The City of Subiaco therefore supports the continuation of the five regional councils seeking waste management solutions. It could all be much worse if one state or metropolitan agency had sole control. Perhaps all that is required is a stronger State Government leadership and coordination role.

KEY FINDING ELEVEN Consideration should be given to establishing a Local Government Commission, comprising an independent chair and persons with significant state and local government experience, to manage the relationship between state and local government, and to oversee implementation of the reform process.

Response A Local Government Commission, comprising an independent chair and persons with significant state and local government experience, to manage the relationship between state and local government is not supported by the City of Subiaco.

Such a Commission would just add another level of reporting, filtering and cleansing that the local government sector can well do without. At the present time, the Western Australian Local Government Association fulfils an informal relationships management role that is more than sufficient.

As pointed out earlier in this submission under draft finding 2, the Integrity Coordinating Group is a creation of the state government intended "... to promote and strengthen integrity in Western Australian public authorities", which includes local governments. The group is intended to coordinate the regulatory clutter and bureaucratic spaghetti created by the Corruption and Crime Commission, the Information Commissioner, the Office of the Auditor General, the Public Sector Commission and the Parliamentary Commissioner for Administrative Investigations. Throw in the Department of Local Government's Local Government Standards Panel and we have six state government entities all charged with ensuring good behaviour in the affairs of local government.

Do we really need another body with more regulatory clutter and bureaucratic spaghetti to make things work? How would the Local Government Commission relate to the Integrity Coordinating Group, if at all? Who would fund its operations and what would be its resourcing requirement?

The 2006 report of the OECD report on Competitive Cities in the Global Economy (p.11) points to evidence that:

Lighter and more informal forms of governance generally tend to better mobilise metropolitan-wide stakeholders around a common vision, but the implementation then requires an action plan and a critical mass of financing that might need a more formal arena for co-operation or collaborative tools.

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The proposed Local Government Commission will undoubtedly have a significant cost attached to it given its intended formal setting. If it loses the confidence of the local government sector (which is a distinct possibility from time to time given that it will be beholden to the state government), then it may simply become a political foil to the Minister for Local Government’s ambition.

More explanation is required from the panel as to the terms of reference for the proposed Local Government Commission, its resourcing requirement, how it would be funded and how it would stay relatively clear of bureaucratic and political entwinement with the state government.

KEY FINDING TWELVE A redefined local government would have its role enhanced including re- empowerment in local planning.

Response The unspoken message of the panel is that the local government sector has had its powers taken away in local planning matters because it has failed to deliver on a state planning agenda.

It is interesting that the panel can be quite categorical about the potential for local government to have its role enhanced in planning matters when the state government quite clearly controls the agenda. All the indicators suggest that insofar as planning matters are concerned, the state government’s agenda will prevail. The creation of the Metropolitan Redevelopment Authority, Development Assessment Panels and ‘specialised centres’ based around major institutions or airports (under Directions 2031) is indicative of a state government desire to have specific rather than broader, high-level planning powers. The ability of the minister to deal with town planning scheme amendments that have been refused by local governments underlines a propensity to take away local government powers rather than to give.

The panel is asked to explain how it can be so sure that the local government sector would have its role enhanced in planning matters?

KEY FINDING THIRTEEN The most appropriate options for local government in metropolitan Perth are: a) 10 to 12 councils centred on strategic activity centres b) five councils based on the central area and sub-regions. c) one single metropolitan council

Response The definition of what constitutes a “strategic activity centre” is not clear. Presumably it the same thing as a “strategic metropolitan centre” as defined under Directions 2031

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and refers specifically to Yanchep, , Stirling, Morley, Midland, Perth, , Armadale, Rockingham and as the new local government centres. The panel should remove any ambiguity as to what is meant by a “strategic activity centre” in its final report.

The panel has given some credence to the 2006 report of the Local Government Advisory Board, Ensuring the Future Sustainability of Communities, by quoting it as a factual source of information on the disadvantages (limitations) of small local governments. For example: • limited opportunity to achieve operational economies of scale and scope • limited capacity to attract specialist human resources • lack of economic strength due to narrow or small rate base and need for above average rates • limited ability to maintain infrastructure • duplication of depots, offices, technology, plant and equipment • limited range of services provided.

While some of the above may be true of many rural and remote local governments, it does not necessarily apply to many metropolitan local governments.

As it stands, both Subiaco and Peppermint Grove have topped all metropolitan local governments in the past two years in terms of overall community satisfaction levels (Catalyse 2011 and 2012 reports) and belies the supposed failings of small local governments.

The panel is therefore encouraged to avoid making generalisations based on the suspect reports of others.

At page 17 of the draft findings, the panel argues that:

Smaller local governments may provide a more limited range of services and some residents fear they would lose services if their local government were absorbed into a larger one. But this need not be the case. As part of the negotiated transition process, arrangements could be put in place so that residents of particular areas could continue to receive (and pay for) specific services that are highly valued.

This is nothing but wishful thinking by the panel.

As stated in this submission’s response to Draft Finding 7, it should be recognised that bureaucracies (and elected members to a lesser extent) will always tend towards standardisation in their search for: • improved economies of scale • the elimination of disparities amongst competing groups of residents, • the internalisation of negative territorial spill-over effects (e.g. indiscriminate car parking).

With that standardisation there will inevitably be a loss of diversity, identity and a sense of place.

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The panel goes on to claim (p.17) that:

At present there is significant disparity in the services received by residents in each local government. Moreover, there is disparity in the financial resources available to each local government. This to some extent is a reflection of size, but is more particularly a reflection of the diversity and mix of the rate base. A restructured local government system would provide a basis for equalising the financial resources available to local governments, and hence the services provided to residents and ratepayers would be more equitably spread.

No evidence is advanced to sustain this claim. In fact it can be argued that the ‘wealth’ of some local governments has little to do with the rate base and more to do with the simple passage of time. The ‘leafy green’ of the western suburbs, which makes it so attractive to aspiring residents, hinges more on the accumulation of community assets over many years and geographic circumstance than it does with “...the diversity and mix of the rate base.”

If the panel’s argument is to be advanced, then an analysis of the impact of the effect of rating disparities is required. Under draft finding 8 above, we asked the following questions in relation to reported rating disparities between the Armadale and Belmont local governments. These questions should be answered by the panel in its final report. • Are City of Armadale residents much the worse off than their City of Belmont counterparts? • Do the rating disparities manifest themselves in any socio-economic index of disadvantage? • What does it mean in terms of the average household rate bill for each local government, assuming that we are comparing apples with apples rather than apples with oranges? • Are Armadale residents moving to Belmont because of the residential rates advantage to be gained there? • Do the differences matter? • Is there any scholastic research that shows that a property tax (rates) is an effective tool in redressing equity concerns.

The City of Subiaco would argue that equity concerns are best addressed through redistributive transfers (grants) from the higher tiers of government with their much broader and much, much larger taxation base when compared to local government.

If the redistribution of income between local governments is necessary via a “...tax base sharing program...” as the panel suggests, will it be then be necessary to create a ‘mini’ Local Government Grants Commission to determine who gets what, where and when? This truly would be a case of bureaucracy gone mad and stands in stark contrast to the panel’s desired outcome of reducing regulatory clutter and bureaucratic spaghetti under draft finding 2.

At page 18 of the report the panel says that “...is of the view that communities in the Perth metropolitan area are more alike than they are different, and while the

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community of interest rationale should play some role in decision making, it does not justify the retention of the status quo.”

The same could equally be said of the students and academic staff at Edith Cowan, Notre Dame and Murdoch universities and The University of Western Australia (UWA). These universities would seem to be more alike than they are different. Why then shouldn’t the endowment lands of UWA be shared with other relatively disadvantaged universities? Why shouldn’t the universities be consolidated to obtain necessary economies of scope and scale? Surely we could thin out the Vice Chancellors and Department Heads and apply the savings to reduced student fees and/or more lecturers in different specialities thus broadening Western Australia’s skills base?

The City of Subiaco does not deny the case for structural reform in local government, but the three models proposed by the panel are too extreme and fraught with risk in the absence of any documentation on agreed roles and responsibilities in a new governance system.

At pages 18 and 19 of the draft findings report, the panel identifies a number of considerations to be taken into account when considering any new form of local governance for metropolitan Perth.

Some of the less contentious considerations are: • the potential for functional realignment • capacity for advocacy and lobbying • ability to generate strategies to deal with metro-wide issues • ability to generate efficiencies and attract quality staff; • impact on future generations • opportunity cost • the complexities arising from splitting local governments and the resulting division of assets and liabilities • differences in the demands of local government in inner and outer areas • the particular challenges of local government in the hills area • that communities and local governments are at different stages of a lifecycle of growth and renewal • understanding the argument that ‘one size does not fit all’.

Some of the more contentious considerations are: • the degree of duplication and fragmentation across the metropolitan area • spread of rate base mix to ensure sustainability • equity and access to services for all individuals across the metropolitan area • that the size of local government is not about population size, but is more about the rate base and socio-economic mix of the population • consistency and uniformity for the business, government and not-for-profit sectors • ability to facilitate an improvement in governance via a significant change in the roles and expectations of elected members • contribution to Perth’s role in the world economy and ability to promote a strong international image

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• capacity to access additional funding from state and federal government, and the ability to demonstrate capability to undertake significant projects.

The more contentious considerations are contentious simply because they introduce new considerations that are not backed up with any evidence or are old considerations that are arguable because of inconclusive evidence.

The panel should consider whether the desired form of local governance can be achieved based on the less contentious considerations, together with some small allowance for the more contentious considerations.

If that is not achievable, the panel must produce evidence of a sufficient standard that not only supports the contentious considerations, but is capable of being tested and properly understood by the community.

The panel should also advise the state government that it must engage with the community in determining any new form of local governance premised on voluntary reform. Without that engagement, there will be bitter recrimination for many decades that will permanently sour the relationship between the two tiers of government.

KEY FINDING FOURTEEN In any future model, the size of the City of Perth should be increased and its role enhanced.

Response The panel devotes a meagre two paragraphs to this finding (p.19):

The size of the City of Perth has emerged as a key consideration, especially since the spilt of the former City of Perth into four local governments in 1993. Increasing the area of the City of Perth is not about reversing those changes, but about making more logical boundaries and building a connection between the City and the key infrastructure and facilities that serve the region.

In any future model, the panel sees the size of the City of Perth increased and its role enhanced. The city must be of a sufficient size to be a serious national and international player, and to advocate for the whole of the metropolitan area, perhaps even the state. By increasing its size, the city will boost its capability and responsiveness, diversify its population, and enhance its international standing.

This finding represents the greatest threat to the residents of the City of Subiaco and is the least substantiated of all findings.

There is no discussion of what constitutes “... a sufficient size to be a serious national and international player.” What is a sufficient size and what game is it that needs to be played?

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There is no consideration of the arguments that saw the City’s split into four local governments in 1993. Simply “...making more logical boundaries...” around the City of Perth does not mean that the vagaries that were visited on the old City of Perth will not be revisited on any new City of Perth. Has the panel found a way of rationalising these potential failings for a new City of Perth?

What is meant when the panel talks of “...building a connection between the City and key infrastructure and facilities that serve regions”. The Mitchell and Kwinana freeways constitute key infrastructure. Is it envisaged that the new City of Perth would encompass the extremities of existing and planned freeways?

Or are we talking about the central sub-region found in Directions 2031 stretching from (and including) the to the , to the City of Canning to the ? What does this mean in terms of equity for the four surrounding sub-regions if they become local governments in their own right? Will the City of Perth become the “first among equals” but find itself disenfranchised and outvoted by the four surrounding local governments who will be less inclined to support any “bright and brassy” City of Perth initiatives?

How could the new City of Perth seriously “...advocate for the whole of the metropolitan area, perhaps even the state” when it has no political mandate to do so? Will there be some newfound benevolence on the part of the City of Perth that is not entirely apparent at this point in time?

In fact a significantly enlarged City of Perth may have a sharp conflict of interest representing its own interests as opposed to those of the Greater Perth region – particularly if it is given functional roles that are not extended to other metropolitan local governments. It may also become a highly “politicised local government” that finds itself at odds with the state and federal governments as the political tides turn.

The panel therefore needs to be quite clear in its final report on how an enlarged City of Perth will be able to function without being fettered at the outset and doomed to repeat the mistakes of the past.

KEY FINDING FIFTEEN It is important to make significant change and create a new structure with robust boundaries to minimise the need for further debate and change in the short to medium term.

Response This finding is accepted by the City of Subiaco only if the panel is able to recommend a new local governance structure to the state government that has broad community acceptance.

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KEY FINDING SIXTEEN Once a new structure is settled, there should be periodic boundary reviews undertaken by an independent body, to ensure the local government structure is optimal for meeting the changing needs of a growing metropolitan region.

Response This finding is accepted by the City of Subiaco while noting that the criteria used by the Australian Electoral Commission is geared towards finding equality in electoral numbers, rather than finding equality in geographic and other communities of interest.

No doubt the panel has given some thought to how minor boundary changes could be effected between the proposed “...fixed interval of between 12 and 20 years” (p.19) given that the construction of freeways and the like may divide existing communities of interest.

KEY FINDING SEVENTEEN The creation of larger local governments alone will not address all the shortcomings of the present system.

Response The City of Subiaco accepts this finding, while noting that monolithic government structures do not lend themselves to flexibility, creativity and innovation.

KEY FINDING EIGHTEEN Local government’s ability to connect to the community is an important asset. In any new local government structure for metropolitan Perth, community engagement must be strengthened, to improve accountability and reduce the power of special interest groups.

Response The City of Subiaco prides itself on its connection with the community, as do many other local governments. Community engagement is a local government strength and any suggestion our communities are not sufficiently engaged is rejected.

Special interest groups have every right to be heard and responded to. To name but a few they include the disabled, cyclists, environmentalists, ethnic groups and young mothers. The panel’s particular reference to reducing the power of special interest groups is ill-conceived if it means excluding those who seek equity or justice in the delivery of works and services to certain sections of the community.

The City of Subiaco notes the following comment of the panel at page 20 of its draft findings report:

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The panel believes that key institutions such as hospitals, universities and airports should not be split across different local government boundaries. At present, the way local government boundaries dissect a number of these institutions creates situations that are less optimal for the institutions and local government.

The simple solution would be to include contiguous institutional land holdings within the one local government area. However the panel goes on to say:

One option is to take the institutions out of local government jurisdiction, similar to the existing situation with Kings Park or Rottnest Island, which both have controlling boards. This is already the case to some extent for , given that all development occurs on Commonwealth land.

The panel is strongly encouraged not to promote this option as it will marginalise those institutions from the local governments that are intended to serve them. It will give cause for local governments not to expend monies in or around those institutions (e.g. road improvements, parkland and reserve improvements and sustainable transport initiatives) and to respond aggressively to any negative spill over effects caused by those institutions, such as indiscriminate car parking.

Rottenest Island and Kings Park are not particularly good examples, suffering as they do with the provision of basic infrastructure for want of state government funding (road maintenance in particular) from time to time. Their non-rateability gives local governments the power to walk away from maintenance issues that might otherwise be owned or shared. This same problem afflicts many isolated, autonomous aboriginal communities.

KEY FINDING NINETEEN Local government must invest in mechanisms that encourage the whole community to participate. Consideration must be given to the development of formal community engagement networks, which may include the adoption of new institutional arrangements and structures to ensure adequate community engagement and access to council.

Response The City of Subiaco supports investment “...in mechanisms that encourage the whole community to participate”. As a recognised local government leader in community engagement, the City of Subiaco is actively implementing a dynamic community engagement policy that responds to an ever-changing environment.

However, the City of Subiaco does not necessarily support the development of formal community engagement networks, which may include the adoption of new institutional arrangements and structures. Community engagement techniques continue to evolve, and yesterday’s community based advisory committee can find itself struggling to fulfil its original role and purpose. It is far better to harness that community energy and commitment to other, more productive, community-engagement pursuits.

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If however, the panel is promoting the formalisation place management techniques as a panacea to the potential outbreak of hostilities caused by the consolidation of many diverse communities of interest into one much larger unit of local government, then it should say as much in its final report.

KEY FINDING TWENTY If the new local government structure for metropolitan Perth comprises more than one local government, a Forum or Council of Perth Mayors should be created, chaired by the Lord Mayor.

KEY FINDING TWENTY-ONE The role of elected members should be reshaped to enhance their capacity for strategic leadership and reduce their involvement in operational matters.

KEY FINDING TWENTY-TWO The potential for council controlled organisations / local government enterprises should be further considered.

KEY FINDING TWENTY-THREE Amendments to governance arrangements for local government in metropolitan Perth should include the following: a) introduction of compulsory voting at local government elections b) recognition of the leadership role of elected members c) election of Mayors by community d) increased remuneration of elected members e) training for elected members f) clarification of the role of CEO and elected members

The City of Subiaco has chosen not to respond to these findings as they are considered to be housekeeping matters that can be attended to as part of the ordinary business of government.

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