PRIME MINISTER

FOR MEDIA AUGUST 17 1980

ELECTORATE TALK

Local governments and local authorities throughout Australia  know now that they will benefit this year from a substantial  increase in Commonwealth funds. The Commonwealth's

undertaking to raise the proportion of personal income tax  collected going to local government to 2% has now

been fully implemented. As a result, the current allocation  for 1980/81 has gone up by more than 35% to more than  $300 million.

At least 30% of these funds are to be distributed to all

in untied grants, there has been a significant shift in the  Commonwealth's arrangements for funding roads.  Over the  past five years, the proportion of funds allocated for local  road funding has risen from 18% to 24% this year.

Income tax sharing with local government was introduced by the  Federal Government five years ago when the level of assistance  under the Labor government was about $80 million. Under the  Commonwealth's revenue sharing arrangements this jumped to

$140 million in 1976/77, and it has been moving up consistently  ever since. With the current $300 million, local government  will have received more than $1,000 million in untied grants  in the five years of tax sharing.

The Commonwealth Government has thus given local government  a substantial and rapidly growing source of funds. It has  done this because in such a vast.country as Australia, local  government is essential for the development of community

identity. Local governments are often the driving force  behind community spirit, enabling a response to be made to  the community's needs which would not be possible from a  remote bureaucracy in a capital city or in Canberra.

The Commonwealth Government does not have a constitutional  responsibility for local government, but it does have a  strong philosophical commitment to giving Australians the  maximum possible control over their own affairs.  Decisions

about water, sewerage, local roads and bridges are properly  made by local government. The smaller the local government is,

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the more say the people in that community have over these  decisions, the results of which affect them on a day to day  basis. The best solution to local problems is local action,  based on local understanding.

While the Commonwealth is moving ahead to take the decision  making process as close as possible to the community, in  New South Wales the Labor government is pursuing a policy  which is exactly the opposite. In the past week, visiting

several shires in New South Wales, I found increasing  resentment of the programme of amalgamations which is being  forced on local and shire councils in that State.

The arguments for merging local government into regional  governments can be beguiling - large authorities would be  financially stronger and more efficient, according to  these arguments. However, the arguments are false. The

financial strength of local government is now assured  because of the Commonwealth's personal income tax revenue  sharing.

The question of efficiency is one for the communities themselves  to resolve. If councils want to combine in the interests of  efficiency, then that is fine. But if the people of a community  wish to retain their own shire, even if it is small and

somewhat less efficient, then that also is their own right,  and that is how it should remain.

Forcing amalgamations on.local councils against the wishes  of the people of a community is a bad principle which  defeats the purpose of local government. A previous  Labor government in Canberra proposed a similar scheme

for amalgamating local councils into a series of regions. The purpose was to undermine the State governments and  reduce their authority.

Both then and now.these amalgamations,when they are not  voluntary, are at the expense of the rights of citizens  to make the decisions affecting their lives to the maximum  extent possible. If a community wants its local government

to remain small, then that is the community's right.

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