With the looming June 30th ‘Fit for the Future’ proposal submission deadline, questions are being raised about the ability of the reforms to address road funding shortfalls.
“The ‘Fit for the Future’ reform package may have been designed to help solve some of the challenges faced by Councils, but unfortunately the issue of road funding is not one of them,” said President of Local Government NSW, Councillor Keith Rhoades.
Rhoades cited the NRMA ‘Local Road Funding’ report, released last week, which identified a $140 million shortfall for councils. “The NRMA found Councils received about $630 million in road maintenance grants, to pay a maintenance bill of at least $770 million each year,” said Councillor Rhoades. “It’s no surprise that the condition of local roads could be going backwards when you factor in this funding shortfall and the limited revenue streams available to councils to make up the difference.”
For Councillor Rhoades, increasing the size of shire councils is not necessarily a guarantee of increased infrastructure backlog servicing. “Council amalgamations won’t reduce the thousands of kilometres of local roads to be maintained, or increase the revenue stream with which to maintain them. For this problem at least, bigger isn’t always better,” said Councillor Rhoades. For example, Ku-ring-gai Council has a backlog of $120 million with a population of 109,297, whilst Blacktown Council, with a population 332,424 people, currently has a backlog of $70 million.
One of the ideas proposed by the NRMA report to service NSW’s $3.2 billion infrastructure backlog was to siphon funding from the Fuel Excise Tax. “The Federal Government collects $15 billion in petrol taxes each year. By investing just 20% of a single year’s petrol tax take we could wipe out the maintenance backlog on local roads throughout NSW altogether,” said Councillor Rhoades.
Due to the tax being a source of Federal funding, it is highly doubtful that 20% of those funds will ever be channelled to service NSW’s infrastructure backlog. If the ‘Fit for the Future’ reform process is not going to solve this issue, than a considerable re-examination of State and Federal infrastructure funding is needed to address the current shortfall for local councils.
