Thank you very much for the invitation to come to RAPAD. It is a great opportunity. I have been to Barcaldine on quite a few occasions, most of the time campaigning, but, this is the first time I’ve had the opportunity to come here and speak to the local community and to see people. I wanted to come because last year Bruce, Rob and Garry came to Canberra when they were campaigning on behalf of the Connect Australia campaign (which sadly we’ve yet to consummate). They came to see me and we had dinner together and we had a good talk. What struck me very forcibly was the contribution they had made to developing regional cooperation through the RAPAD program, and they were enthusiastic about it. They were committed and they were obviously trying to work hard on behalf of their communities. So I said at the time that I was very keen to come and see what you in RAPAD were doing up here. This is the first opportunity there has been for me to and I’m grateful for the time you have made available.

I didn’t really come to pontificate, at least I hope not. I really came to listen and to hear what you have to say: I am more interested in knowing the kinds of issues that you’re facing (I realise that amalgamation is the primary one) and some of the concerns you have about them. I thought I would make a few remarks about local government and devolution and issues of regionalism, because it is a strong interest of mine and I actually don’t think we’re spending enough time turning our minds to this issue.

The starting point for this whole issue from my perspective is that 100 years after Federation, the Australian system of Government has become increasingly centralised. This would be of great surprise to the founding fathers – the people who drew up the constitution in the 1890s and created a federal system. They created a federal system because they wanted to devolve power. They wanted to anchor democracy within the context of the country’s increasingly manifest diversity. It is very clear from the constitutional debates there was an expectation that, for example, there would be new states created and many of them. And of course as you may know there is a specific provision in the constitution in relation to that. But there has been no change – no serious, significant change in the political geography of Australia since about 1911 when the Northern Territory became a separate part of what was then the state of South Australia. The founding fathers would be particularly surprised about the situation in Queensland. Because, at the time the colony was created in 1859 there were only about 23,000 people in Queensland. Now of course, we’re up to up to four million, one hundred thousand or thereabouts and growing; surely the basis for greater devolution. The vote for Federation, which in some colonies was quite close, was strong in Queensland, particularly in northern Queensland because the people of the north expected that it would be a basis, a foundation, on which they would have their own state; experience their own form of devolution and be able to fulfil their own sense of identity. The reality today is that there is a low correlation between the real-life communities of Australia and the kinds of boundaries we have to distinguish them, and separate them. This is very inefficient, although we as politicians ought not just to be thinking that efficiency is the only thing that is important in the way we do business. But it is unhealthy for a representative democracy to have this lack of correlation. It means that there is a poor relationship between the level of government we expect to deliver a service, and the people responsible for it.

The Beattie proposal for amalgamation is the most recent in a long line of proposals and attempts to try and solve the efficiency problem in relation to local government. Whatever it might do for Queensland - and I sceptical that it will be very much - I don’t think this kind of “reform” is a solution to the wider national problem we have. It is certainly not an attempt to try and address the problem of representation. I hardly need to say to this audience that it has been terribly, badly handled. In fact, if I was still at university, where I was before I went into the Senate, I would probably be offering this particular proposal - for profound policy change, to my students and saying this is a textbook example on how not to undertake reform. It is a failure like the Traverston Dam proposal, in which I have an interest as a member of the Senate committee examining the proposal.

I know that you have all been assessed in one way or another, or at least some of you have been assessed. Clearly from the public announcements of your particular financial circumstance some of you are very efficient, some of you are less so. Some of you apparently don’t have any efficiency at all. Those of you from Barcoo and Ilfracombe who are not on the list that I’ve seen – the public list – are either very distressed, which may be possible, or you are very strong indeed.

This has been an extraordinarily badly handled proposal for reform and certainly very badly handled in relation to the idea, the proposition, that what we ought to be trying to do in Australia today, and particularly in Queensland, is to try and strengthen local government. In fact, the approach is precisely the wrong way to go about change. This is a top down proposal for reform and its consequences are likely to be precisely not what we’re trying to achieve because it reinforces the mendicant mentality and mendicant status that exists between local government and the State Government. It reinforces the idea that local government and councils are subservient to the State. Of course they are in terms of the legislation, but, rather than reinforcing the idea that local government ought to be taking responsibility, that it ought to be trying to find solutions to the problems of local communities, it basically says you have failed and we are coming in over the top and we will sort this out because you are essentially hopeless at doing it. What we ought to be trying to do - I would have thought - is to try and reinforce the foundations of local government, to build stronger social communities, to build and strengthen local economies, and of course to enhance representation in the process. The direction this amalgamation proposal is taking is to put all of those valuable aims at risk. We are on the wrong course here. I don’t need to tell you that. I know you have strong convictions about it.

But what of course is also true is that all the evidence we have from other efforts of amalgamation in other states and indeed other countries, is that these kinds of reforms rarely work. The efficiencies achieved are very low indeed. In almost all of the examples – Victoria and New South Wales etc – where amalgamations have been undertaken, the results have been from the point of view of the governments that have initiated them, extremely disappointing. And of course disappointing to the communities involved.

At a national level we need to ask ourselves what’s the problem here? What should we be trying to do? Not so much in relation to Beattie’s amalgamation but in relation to the wider question of responsibility at local government level or at regional level. The evidence from here and overseas is that devolution provides us with a better basis for good governance. You will be familiar, perhaps, with the notion or the idea of subsidiarity. This is a good principle in relation to managing devolution. It holds that decisions should be taken and responsibility should be exercised as close as possible to the people and at the lowest level of competent authority. The idea is to try and give responsibility to the level of government that is closest to the people and which has the competency or capacity to carry out the kind of functions that need to be provided. We have talked about this in Australia for a long period of time. We have given it lip service, but we have not been serious about implementing the principle.

Several things are happening in local government which are causing the kind of distress, which is evident around the country and presumably the kind of distress the Beattie Government is trying to address. It is all set out in the Dollery and Johnson report that you had commissioned. In many ways it is a very fine report – a very interesting analysis. I suppose if there is one criticism I would have of it, it is that it tends to focus very narrowly on the relationship between local government and state government and it really doesn’t spend too much time thinking how we might creatively bring in the federal government to try and address some of these problems. But I assume this reflected the brief given to the authors in relation to the amalgamation issue.

As the report says, several things have been happening that make life very difficult for local government: higher tiers of government are passing down responsibilities and new functions. They are making increasing demands on your capabilities – here they are not passing on functions, they are saying you have got to do these things in a more sophisticated way – you have to improve you’re capacity. Cost shifting is clearly taking place to local government from state and federal levels. Increased community expectations of service are making demands and I noticed from the report, which was very illuminating in this respect, that many of you responded to your communities by creating various kinds of services which would otherwise not be the role of councils. In short you have all expanded the services you provide and that seems to me to be a good foundation of responsible government - strong representative government. But, of course the problem here is that you have taken on these responsibilities without the capacity to raise the revenue, from a low rate base, and with limited compensation from other tiers of government which have been asking you to take these responsibilities.

I regret to say that this is likely to get worse rather than better, and amalgamation is not going to solve the problem. There are various reasons for this. One is that state governments across the country seem to me, and they just happen to be Labor of course, to be less responsive to some of the demands that are being made upon them, particularly remote and regional areas. Another reason is that we have had for a long period of time a shift of population away from the regional and rural areas to coastal areas and that is of course demanding that states respond most to the infrastructure and developmental challenges on the coast. Third, the Commonwealth is increasingly uneasy about the money it is giving to states and seeing it dissipated in bureaucracies and not represented in the provision of services, whether it is for coal support facilities or new roads or hospitals or schools – whatever it might be. There is a real frustration, I can tell you, at the Commonwealth level at the extent to which states are getting large amounts of revenue and the payoff for the people who should be getting the benefit of the revenue is not evident in the way in which they’re providing services. They are showing poor accountability. Finally to put this into a really big picture not just in relation to the federation, I actually think issues of globalisation are coming into play in here, because one of the realities of globalisation is that it seems to focus peoples’ attention on locality. It seems to focus peoples’ attention on localism. Increasingly people want to feel closer to their own local community because so much about the world’s going on around them is remote and removed from their ability to affect it. The point to reinforce is that the pressures that local governments are under are likely to increase, and the Beattie amalgamation proposal is unlikely to go very far in addressing the problems.

What then, can do we do about it? We need to fundamentally rethink the way in which we organise federalism in Australia. In particular there is a strong case, not towards greater centralisation, but towards less centralisation. It is perhaps not often that a Commonwealth politician goes anywhere, particularly to talk to local government, where they say it’s a great idea if we have less centralisation. In fact, many at the Commonwealth level would be inclined to see this as something of a nightmare – a recipe for a federal- state financial train wreck. But, it is an idea that deserves closer attention than what we have been so far prepared to give it. The criticisms of the idea fail to acknowledge the potential productive power of the regions; they fail to acknowledge how restructuring can promote innovation and economic sustainability around the regions; and they fail to appreciate how governance is a shared activity between regions or between local, state and of course federal government.

Managing a modern federation is not a competition. It is not a competition between the various levels of government to gain and sequester resources. If anything, it is collaboration between the levels of government to try and deliver services where they are needed to our communities, to do so reasonably efficiently and through good representation. There still seem to be parts of the country that have attitudes towards government as being fiefdoms. The state government wants to have its resources; it want to have its budgets; it does not want Commonwealth interference. The kind of resistance going on in Victoria now to the Commonwealth’s proposed water plan is a good example. Ten billion dollars has been put on the table and yet the Bracks government is hanging out because it wants particular things preserved for Victoria. Now their concerns may be legitimate, but there is more than a modest element of protectionism here: we don’t want you to come into Victoria and muck up what we’re doing because we think we do it better than anywhere else.

The model for the future is not 19th century ideas of government. It is not 20th century ideas of government. It is 21st century ideas of government – much more sophisticated in the way in which the three levels of government co-operate with each other and provide services. If we are prepared to think about the model in different kinds of ways, we will get benefits from it. We will get a more effective political system, better democratic representation and accountability. Not what is taking place now here in Queensland where your decisions, the representation that you have for your local communities, has essentially been taken out of your hands. And what is striking about this is that it is not just you in local government saying this is a bad idea, but your communities are coming out in support of you and saying this is a bad idea. The message seems clear: we don’t want this taken out of our hands. More generally, some of the surveys that are being undertaken by universities and people who are doing work in this area, all underscore the idea that Australians are actually tuned into these concerns about the effectiveness of different levels of government and they appear to want change. They want more say in government. So we can certainly get better representation. We can have more efficient and responsive public administration and I think we can have stronger communities, which in the end ought to be an aim of reform. We can have communities with higher levels of social, economic and environmental sustainability.

In conclusion, ladies and gentlemen, I think the Commonwealth needs to take a lead here, but regional communities themselves have a really important role to play. I know you have been agitating for change in relation to recognition of local government at a constitutional level. I think you need to keep that campaign up through the Local Government Association of Queensland and the national association. And I expect that if we were to go down this path of reform, the Commonwealth will have to accept responsibility for a more direct relationship with local government or regional communities, depending on how we might like to think about possible restructuring. The Roads to Recovery program provides something of a model, it’s a model that might be used in relation to other services. If we think creatively about how we could deliver services we could come up with good ideas, ones that deliver real efficiencies.

There are various models for change and I noticed from Dollery that in relation to local government he has a couple of ideas there in relation to regional organisations of councils, joint boards, strategic alliances and things of that kind. Better regionalism is a credible possibility and if we want to be really grand and bold we could think of new states in some parts of country. The point is that we need to think seriously about this because the problems we face are not going to get any easier to solve without reform.

Finally, can I just say how impressed I am with RAPAD’s activities. The sort of work that you’re doing in cooperating, in trying to share costs, working together, cohesively to try and achieve better outcomes for your communities is very important and a model for other shires around the country. The work you have done in relation to amalgamation proposal by putting in a joint submission to the state government reinforces that sense of cooperation. It reinforces the kind of ideas that are important to Australia’s future– the idea of regionalism – the idea of community of interest – of working together. They should be well established and traded ideas, but in some parts of the country and in Queensland they are not. This is a very unproductive and dysfunctional way to run local government. It’s a very unproductive and dysfunctional way to think about managing the country’s future and it’s a very unproductive and dysfunctional way to represent communities. The thing that strikes me about RAPAD is how little of that kind of uncooperative mentality exists among the shires. It is exactly the kind of spirit that should underpin the way you represent your communities. Thank you for giving me the time to talk to you today.