Enquiries: Chief Executive Officer Phone: 07 5540 5111 File Ref: 14/03/007

2 July 2018

Senate Standing Committees on Economics PO Box 6100 Parliament House Canberra ACT 2600

Submission to Inquiry: Regional inequality in Australia

On behalf of the Regional Council I provide details below in response to the Senate Standing Committee on Economics' Inquiry into Regional inequality in Australia. I thank you for the opportunity to provide this submission.

The is located in the foothills of the in South East . Home to a population of more than 42,000, the region covers 4254sq km and is located an hour south of and an hour inland from the Gold Coast. The region's primary businesses are agricultural/horticultural production, the equine industry and tourism/ecotourism. The most recent Australian Business Register indicated there were an estimated 4,301 local businesses (i.e. actively trading and registered for GST) operating in the Scenic Rim in June 2016, which represented an annual increase of 75 businesses, or 1.8%.

Over the past five years, the population of the Scenic Rim Region has grown by 3,538 persons, or an average annual rate of 1.8%,higher than the average for Queensland (1.6%).

Council's response aligns with the categories identified in the terms of reference as follows:

a) fiscal policies at federal, state and local government levels;

Issue 1 - Financial Assistance Grants (FAGs) require a revised calculation methodology

Background

The FAGs are administered by the Queensland Local Government Grants Commission (QLGGC) whose methodology uses a ten-year average of land valuations. This process does not conform with the concept of quality data or the equitable treatment of councils facing similar circumstances. This methodology was introduced in 2011 to assess the rating capacity of councils and followed a period of wide fluctuation in valuation changes.

In addition, rating capacity is assessed at an aggregate level rather than across residential, commercial/industrial and rural land use categories as was the case prior to 2011. This results in the use of valuation alone to measure fiscal capacity, which is not considered appropriate as the Productivity Commission (PC) noted in its review of local government revenue-raising capacity (PC 2008, p. 53), "income is a more appropriate indicator of the fiscal capacity of a local government than the rateable value of land."

The assessment of rating capacity has a significant impact on the FAGs outcome for each council and no other State Local Government Grants Commission uses an average of land valuations over such a lengthy period in their FAG calculations, although some do use a three-year average.

The Local Government Association of Queensland states that "the grants methodology should be transparent and easy to understand, based upon quality data, produce consistency and predictability in grant outcomes and ensure equitable treatment of councils facing similar circumstances."

It is considered that the current FAG methodology to assess rating capacity is flawed and should be reviewed to provide a more robust, accurate and equitable assessment of rating capacity as at present this is resulting in an inequitable outcome.

PO Box 25, 82 Brisbane Street Tel 07 5540 5111 ABN 45 596 234 931 Beaudesert QLD 4285 [email protected] www.scenicrim.qld.gov.au P a g e | 2

The FAG formula is inequitable because a smaller or rural/regional local government lacks the ability to raise revenue other than through property rates. This revenue stream is too small despite the valuation of the land, to be able to meet the aging infrastructure burden and demands of these communities.

This situation is worse for these smaller and rural/regional councils with their lesser developed commercial and industrial sectors. These sectors deliver a greater opportunity for broader rating revenue, with smaller and rural/regional councils relying on these mainly residential and rural sectors with their ratepayer base having a lesser deemed capacity to pay.

In this regard, larger centres have a more defined commercial and industrial sector which can deliver enhanced rating options, more population growth at around 5% per annum and receive an ever-greater percentage of the FAG funding pool which only grows at 2.5% per annum.

Outcome Sought

The desired outcome is a fairer and more equitable assessment of valuations and rating capacity within the FAGs process for all councils, which is based on their current circumstances.

Issue 2 - The identified Local Road Component within the Financial Assistance Grant (FAG) requires an increase in the level of funding and a review of the local road distribution methodology.

Background

A recent inquiry into the long-term financial sustainability of local government in Queensland conducted by the Queensland Parliament's Infrastructure, Planning and Natural Resources Subcommittee identified that the issue of vertical fiscal imbalance in the share of taxation revenues between federal state and local governments in Australia is a key contributing factor to the challenge of local government achieving financial sustainability in Queensland. It is estimated that local government only collects 3.6% of all government taxes but is responsible for 36% of non-financial assets held by all spheres of government.

This challenge continues to be exacerbated by declining levels of funding provided by other levels of government to local government, lack of certainty about funding streams and decisions made by state governments to restrict local government funding levels, such as capping infrastructure charges in Queensland and capping general rate revenue levels in some other states.

The fundamental problem is funding for roads, with a recent Local Government National Report showing that local government's local roads are worth approximately $75 billion and that local government has an annual local road deficit of about $644 million per annum (or $344 million after the $300 million per annum Roads to Recovery funds are included).

The imbalance is greatest in Queensland and is exacerbated by the financial assistance grants distribution between the states.

It is estimated that Australia has about 810,000 kilometres of public roads with 650,000 kilometres (80%) of these local roads the responsibility of local government. About one-third of this network is sealed and two- thirds is unsealed.

Until 1990-91, the Commonwealth Government provided specific purpose grants to local government for local roads under the Australian Land Transport Development Act 1988. The grants were distributed on the basis of criteria in this Act. The October 1990 Special Premiers' Conference agreed that road funds would be untied, with the effect of this decision being a freeze of the interstate distribution of identified road grants at the historical share that applied in 1991-92.

Australia is a vastly difference place now compared to 1991, and an updated distribution methodology some 28 years later is sorely needed.

General purpose assistance has been declining as a proportion of gross domestic product (GDP) since at least 1991-92. In the absence of action to change the situation, this trend will continue. The Local Government (Financial Assistance) Act 1995 provides for the level of financial assistance grants and identified road grants to be increased annually in accordance with rates of population growth in each jurisdiction and changes in the

P a g e | 3 consumer price index. This formula maintains the per capita value of assistance in real terms and places a 'floor' under the level of assistance. But the formula does not provide growth in the real level of assistance. Since GDP has grown faster, the level of general purpose assistance has fallen as a proportion of GDP. The Australian Local Government Association has argued that the level of general purpose assistance should be increased and set at 1% of total Commonwealth taxation receipts..

Regional Australia has a dispersed economy with a high reliance on logistics to facilitate economic growth. Both state and local roads are a key contributor to enabling access and facilitating the distribution of products and, as such, are critical to the rate of GDP growth. Additional funding for these critical assets will assist to lift the rate of GDP growth in regional Australia, and within the Scenic Rim, and thus benefit the Queensland and Australian economies.

The RDA Ipswich & Regional Roadmap 2016-2020, developed by the Ipswich and West Moreton Regional Development Australia (RDA) branch, identifies three key infrastructure priorities including transport and logistics infrastructure to support economic growth. A key risk identified in the roadmap is that poor quality roads and limited capacity bridges add time and cost to the transportation of regional goods, thus affecting industry competitiveness.

Outcome Sought

The desired outcome is an underlying level of funding availability for road infrastructure that assists with addressing the issue of local government financial sustainability and facilitates economic growth in regional Australia. An increased level of funding for the Identified Local Road Component of Financial Assistance Grants is sought, along with a review of the local road distribution methodology which has not been reviewed since 1991-92.

b) improved co-ordination of federal, state and local government policies;

Issue 3 - Public transport and transport for medical and mental health access requires improvement, including disadvantage due to location of services.

The Scenic Rim has the unenviable position of being split across three Health and Hospital Districts, along with three Primary Health Networks. The districts and networks generally do not coordinate with each other, which can make it difficult to engage and advocate on key issues such as drug and alcohol, mental health and domestic violence.

In basic geographical terms, Beaudesert is often considered part of , Boonah as part of Ipswich City and as part of Gold Coast City. The Scenic Rim is geographically disadvantaged by being surrounded by three large local government areas in . Our communities tend to be tacked onto these larger corridors as some sort of afterthought.

Anecdotally we are also aware that many larger community organisations which are based outside the Scenic Rim include our townships in their funding submissions. This then translates into little or no presence in our region. Funding bodies are often led to believe that our communities are being serviced by these organisations, making it difficult to advocate for increased services or funding to meet real demand.

As an example, Beaucare Inc. (Beaucare), a place-based agency operating from Beaudesert and providing support across the Scenic Rim area and surrounds, has operated successfully, meeting all acquittal and quality requirements for over 32 years. As a trusted and central support agency for our community it is funded through 19 individual grants, including Youth Support, Intensive Family Support and Domestic Violence Prevention from the State.

With population growth in the Scenic Rim region, a significant gap in service delivery is occurring, and in 2015 it was identified that Beaucare's ability to support clients was far outweighed by demand. The Beaucare model of working with those who 'fit' the funding grant specifications has been leaving a large number of community members with highly complex and critical needs unsupported.

In July 2017 Beaucare self-funded an Assessment, Referral, Intake and Allocation Team (ARIA) to manage the initial contact with any client. This process confirmed that demand has outstripped all forecasts of need,

P a g e | 4 and given the population projections for the Scenic Rim region and over 1,000 additional clients in eight months, there is a critical need for additional funding and service provision to support current demands.

It is also evident that drug use and dependency are on the increase with illicit drug taking more prevalent in homes. There is often a correlation between drugs and domestic violence and mental health issues. A number of local residents also often have to report to community services in Logan City and they can have difficulty in finding public transport to attend their various appointments, as they must firstly travel north before being able to get a connecting service across Logan City. A couple of local agencies offer local bus runs to medical appointments but the contribution for the journey has recently risen and it has become a concern for these residents.

In addition, whilst there are a number of campaigns in place to help overcome myths regarding mental health, more is needed with a greater awareness on issues and available local support as the first step in tackling the issue. According to the Report of the National Review of Mental Health Programmes and Services (2014) "it is clear the mental health system has fundamental structural shortcomings. The overall impact of a poorly planned and badly integrated system is a massive drain on people's wellbeing and participation in the community".

It is also recommended that the Scenic Rim Health and Wellbeing Plan 2015-2020 be consulted as part of this submission. A copy of this document can be accessed from Council's public web site at http://www.scenicrim.qld.gov.au/documents/717563/4859178/SRRC%20FINAL%20Health%20and%20Wellb eing%20Plan%2028%2009%2015.pdf Please refer to the 'Partnerships' section, commencing on page 17.

Outcome Sought

With a growing population in the Beaudesert region, social services are in need of improvement. Beaudesert needs dedicated services for mental health, drug and alcohol addictions, and family services rather than outreach from Logan, Ipswich or the Gold Coast, and not one day a week here or three days a fortnight there. The region needs support on a full-time, ongoing basis to help families and individuals affected by encroaching health issues and far better transport solutions for those with medical and mental health issues.

c) regional development policies;

The Bromelton State Development Area (SDA), gazetted by the in 2007, is located six kilometres west of Beaudesert and comprises a 15,000-hectare footprint, with approximately 1,800 hectares dedicated to rail dependent industry, major industry and sub-industry. Bromelton is a nationally significant green freight precinct. It is an intermodal, industrial and logistics hub, strategically located within one hour of the Port of Brisbane, Australia’s fastest growing container port.

The Queensland Government, in partnership with the Scenic Rim Regional Council, made a significant investment in the provision of critical infrastructure to support industrial development within the SDA, including the construction of the Beaudesert Town Centre Bypass and a trunk water main connecting the Bromelton precinct to Beaudesert.

Through $9.6 million federal government grant to the Scenic Rim Regional Council as part of the National Stronger Regions Fund, the Australian Government assisted major Australian rail and transport provider SCT Logistics to establish a $30 million freight precinct adjacent to the Sydney-to-Brisbane rail line in the Bromelton SDA. This development represents the area’s first intermodal freight precinct. The new facility offers domestic rail line haulage services, as well as warehousing/property solutions. The freight precinct commenced operations in January 2017, providing seamless rail connection between Victoria and Queensland.

The Australian Government has also committed $8.4 billion to deliver the Inland Rail project, providing enhanced connectivity between Brisbane and Melbourne, which will intersect the present interstate rail line at the northern end of the SDA, placing Bromelton at the crossroads of coastal and inland rail. Australian Rail Track Corporation (ARTC) has purchased nearly 850 hectares of land in the Bromelton SDA.

The SCT precinct will have an annual capacity of 1.3 million tonnes and targets the North South freight corridor currently dominated by the road industry. The total road freight movements into Queensland from southern states was estimated at 16.2 million tonnes in 2014, whilst the total tonnes carried by road from

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Queensland to and Victoria was approximately 13.0 million tonnes.

The SCT precinct represents an initial direct employment impact of approximately 120 FTEs, with an associated direct contribution to gross regional product of an estimated $30 million; the flow-on employment impact is a further 340 FTEs and additional economic contribution of $52 million (Lawrence Consulting).

Outcome Sought

The desired outcome is the further commitment by the State to development within the Bromelton State Development Area to maximise its value to Queensland and Australia.

d) infrastructure;

Issue 4 - Road transport infrastructure is not keeping up with the needs of the community

Background

There is a need to invest more funding into the State-controlled . The areas surrounding the Highway are experiencing continued growth, with traffic volumes increasing significantly every year. Many sections of the Mount Lindesay Highway are nearing capacity, which is affecting safety.

The Queensland Department of Transport and Main Roads (DTMR) has identified the Mount Lindesay Highway as one of Queensland’s poorest safety performing roads.

In 2015 DTMR undertook a safety review on the Mount Lindesay Highway between Logan and the Queensland/New South Wales border. This section of the Highway connects Beaudesert and Rathdowney townships in the Scenic Rim region with other population centres to the north and south. The Mount Lindesay Highway Safety Review was designed to identify road safety issues and develop a program of integrated road safety initiatives to reduce the incidence and severity of crashes along the length of the Mount Lindesay Highway.

Further information regarding the Mount Lindesay Highway Safety Review is available from the DTMR web site: https://www.tmr.qld.gov.au/Safety/Road-safety/Mount-Lindesay-Highway-Safety-Review.aspx

While Council acknowledges that implementation of key recommendations of the safety review through projects undertaken in the Safer Roads Sooner program has lessened some safety issues, the region's population growth coupled with the increased truck movements along the Highway from the expanding Bromelton Industrial Estate are resulting in general congestion and bottlenecks. This will increasingly restrict economic development unless significant upgrades are delivered soon.

Outcome Sought

The desired outcome is the upgrading of the Mount Lindesay Highway as a matter of urgency with road funding in regional areas benefiting the whole Australian economy through efficient freight movement into Brisbane, the Gold Coast and overseas markets.

Issue 5 - Lack of crisis, community and affordable housing that is failing to keep abreast of the needs of the Scenic Rim

Background

The population of the Scenic Rim will increase by over 50% to 64,000 people by 2036, creating a need for an additional 10,000 homes. With population growth comes a need to increase community-style housing.

Monitoring the housing stock will be important as the population targets are reached. Ensuring housing is supplied at a similar rate to demand is challenging. There is a limited quantity of emergency housing provided locally, primarily in Beaudesert, however services providers have indicated that there is currently unmet demand. That demand is likely to increase over the next ten years, with crisis housing often used by people experiencing homelessness, by young people at risk, as well as victims of domestic violence.

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It is reported that there are 168 government houses in the Scenic Rim, with 152 being public housing and 16 community housing managed by services providers. Mununjali Housing & Development Company indicates that there is homelessness, couch surfing, sleeping rough and overcrowding, with considerable wait times for government housing to become available, particularly for Indigenous families. The Company expects this issue to worsen in the next five years, and influencing housing supply will be one of their main priorities from an advocacy perspective.

Outcome Sought

The desired outcome is the provision of additional crisis, community and affordable housing that keeps ahead of housing demand within the Scenic Rim.

Issue 6 - Inadequate mobile phone coverage within areas of the Scenic Rim region

Background

There are many problems with the lack of mobile phone coverage across the region. Affected landowners have requested an immediate response to their concerns as this issue impacts on every industry, both commercial and private, within and beyond the boundaries of the Scenic Rim.

For example, the prosperity of this region is largely dependent upon tourism. How can visitors 'google' directions for tourism destinations when there is no reception? How can tourists urgently contact authorities, emergency services or roadside assistance without mobile reception? Without region-wide mobile telephone coverage, the response time for the Police, State Emergency Service, Rural Fire Services, Ambulance and RACQ personnel called out to locate and attend emergencies is dramatically increased.

Many residents have life-threatening illnesses. How can they make immediate contact with medical and health professionals in emergencies? During severe weather and fire events, the electricity supply and telecommunications landlines are often cut off. Recently, there have been frequent instances when there has been no way to communicate with the emergency authorities from affected properties. In these circumstances, residents are completely isolated without mobile telephone access on a 24/7 basis.

Many commercial businesses in the Scenic Rim, including those that are operated from private homes, rely upon mobile phones and feel discriminated against due to the lack of mobile reception and subsequent impacts on their business.

Families in the Scenic Rim are experiencing feelings of helplessness when local mobile phone reception frustrates efforts to contact family members, especially when an emergency arises.

Outcome Sought

The desired outcome is an improvement in telecommunication facilities that provide mobile reception across the Scenic Rim region, facilitating emergency, business and family communications.

Thank you for considering these important matters to the community of the Scenic Rim region as part of your Inquiry.

Yours faithfully

Cr Greg Christensen MAYOR