Hansard debates

  Mr  LONEY  (Geelong North)  --  Like the honourable  member  for Bellarine,  I
welcome the opportunity to speak on the  City  of  Greater  Geelong  Bill,  even
though my comments may be somewhat at odds with his. The Bill is one of the most
important  Bills about the Geelong  region to come  before Parliament because of
the effect  it will have on the region. It seeks  summarily to do away with more
than  100 years of municipal structure in our city  and to replace it with a new
amalgamated  structure.  Currently  there  are  nine  councils and  the  Geelong
Regional Commission.

That will be changed to four councils and no Geelong Regional Commission.
As  was  said  by  the  previous  two  speakers,  the  amalgamation  or  council
restructuring debate has gone on in Geelong over many years.  The issue has been
contentious for many years. Indeed, there have been a number of attempts to gain
some form of municipal  reform  in  the area, including under the previous Labor
government.
A brief  history of some of those most recent  reviews would  include the  Heath
committee report of 1990, which was a community initiated report rather than one
externally  inspired,  as  was also  referred  to by the  honourable  member for
Bellarine.  He noted the  collection of 20  000  signatures following the  Heath
committee  report.  It  is  important  to  place  on  record that those  20  000
signatures were from people asking for a local government  inquiry  to  be  held
rather than from people saying they were in favour of amalgamation.

There is quite a difference in those two positions.
In 1985 there  was a local  government  report into municipal  restructuring  in
Geelong; in  1978 there was the  Bains  report; and in 1962  there  was the Mohr
report. All reports dealt with what would be an appropriate or  applicable local
government body for the Geelong area. Each of them  came to  the conclusion that
there should be municipal restructuring in Geelong in some form or another; they
all  supported that  need. It  is also  important to note that they  all stalled
because of strong local opposition. The Heath report ended in considerable legal
action.
This eventually led to visits to Geelong by  the then  Leader of the Opposition,
now Premier, and the shadow Minister, now Minister for  Local Government, in the
lead-up to the 1992 election.

They put forward their policies  on municipal reform in the Geelong region but -
and it is a very big  but - they both stated on a number of occasions that there
would be no forced council mergers in the Geelong area. I refer to an article in
the  Geelong Independent of 26  June  1992  headed    No  forced  mergers,  says
opposition . That article states:
  Regional councils would not be  forcibly merged under  a coalition government,
  opposition spokesman on local government, Roger Hallam, said this week.
  Mr Hallam said that the nine Geelong  region councils should only merge if the
  notion was supported by the community ...
  Mr Hallam qualified  the  opposition's stance  by  saying they  would  support
  amalgamation  if  it  was  supported,  but  not  necessarily  called  for,  by
  residents.

  A plebiscite was one alternative to gauge community sentiment.
Such  comments led to a community expectation in Geelong  that  there  would  be
widespread consultation prior to change and that the community at large would be
given some  opportunity  to express  a view,  but that  has not  been done.  The
community
was not consulted.  Following the election the  government moved to fast-track a
forced  amalgamation through  a  process that  in  no way  resembled  widespread
community consultation. The  government  used  the  accounting  firm  KPMG  Peat
Marwick  to  conduct an audit  of local government bodies,  the Geelong Regional
Commission and the Geelong and District Water Board.

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There is little doubt about the impetus  for  determining to fast-track a forced
merger  rather  than seeking widespread community consultation, which the  local
community had  been led  to expect.  The most  notable influence  was that  of a
number  of  local  anti-Geelong  Regional  Commission  Liberals and the  Geelong
Businesses Leadership  Team,  which is known  in  Geelong as  the  South Geelong
branch  of the Liberal  Party. Both groups had  considerable influence over  the
process that was adopted.
KPMG  conducted  its audit over a three-week period, in which it  offered  local
councils 45 minutes each to present their views. The government holds that up as
consultation! The accounting firm also held discussions with other groups.

The report reveals that the audit team   consulted   with the following employer
and  community  organisations:  the  Australian  Chamber  of  Manufactures,  the
Victorian Employers  Chamber of Commerce and Industry, the Metal Trades Industry
Association, the Geelong Regional  Retailers, the Geelong  Businesses Leadership
Team  and  the  Committee  for  Greater Geelong. Under   Unions   it  lists  the
Australian Services Union and the Municipal Employees Union.
It  is  difficult  to find any  group  that  could  be  considered  a  community
organisation.  If  honourable members know Geelong reasonably  well,  they  will
recognise a fair amount of overlapping membership in those  groups -- members of
one group are also members of others.
It  is  also  worth  noting  that consultation was held only  with  groups  that
requested  it. No invitation was issued to community groups to speak to the KPMG
audit team.

Little wonder there is an absence of  real community groups in that consultation
process.
A  workshop was  then  held on  Friday,  22  January, which  most  organisations
reported as being totally inadequate.
On 16 March the report  was issued  and its recommendations were as most members
of the community had grown to  suspect  because their views were not considered.
The most anyone can say about the report is that it is well bound. The report is
of   poor   quality,   lacks   rigour   and  contains  many   inaccuracies   and
inconsistencies. In comparison with the Heath report it lacks financial data and
background  information to support its conclusions. It has  lazily relied on the
Heath report and others conducted over the years.

The first  inconsistency  is  that  KPMG has taken a different approach to asset
valuation when dealing  with the Geelong  Regional Commission from the  approach
taken when dealing with other bodies. The report says that the assets of the GRC
must be written down because of the market, but the same approach is not applied
to  the Geelong City Council or the Geelong  and District  Water Board.  That is
singularly inappropriate.
I refer  the  House to the  1991  critique by Coopers and  Lybrand  of the Heath
committee report, which also referred to the  Geelong City Council's assets.  It
came to a different conclusion:
  But the real concern is Market Square ...
  Therefore a risk is present if:

    a major tenant is lost; and/or
    other factors force trading losses; and/or
    values fall significantly; and/or
    the loans cannot be refined in 1993 at reasonable interest rates;
  then the city would suffer  a loss and eventually  this would be borne by  the
  ratepayers. This is a risk which the other councils are  right to take account
  of.
KPMG  Peat  Marwick  did  not  take  account  of  it.  It estimated cost savings
amounting to  $2 million-plus for running the regional commission that currently
comes from the State government.

The  shadow  Minister  for  Local Government explained that that is not  a  cost
saving to local  councils -- in fact the reverse is true. If  local councils are
to pick up the operations of the GRC it becomes a cost burden rather than a cost
saving.
The report  also quotes figures from the  City of Knox to  support its case, but
those  figures are  wrong.  In order  to  demonstrate comparative staff  numbers
within each council the  report says that 816 people are employed by the City of
Knox, but there are actually 1058. The report  also fails to allow for  the fact
that  services are  contracted  out by  the  municipality.  Although  the  audit
considered earlier
reports, it failed to examine any of the critiques of those reports.
The Bill differs from the KPMG recommendations.

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The first major  difference  is  the  omission of the Borough of Queenscliffe --
which  probably henceforth will be known as the Anomaly of Queenscliffe, because
we are not  sure why it was omitted.  The Minister for Local  Government said it
was  because  Queenscliffe  is  unique. The Premier said it was because  of  the
council's effectiveness.  Some people suggest the uniqueness of Queenscliffe has
a lot to do with the number of influential Liberal Party members living at Point
Lonsdale who have exerted pressure.
The second major change is that  there  is no Geelong transition committee. That
proposal  was  dropped  and  no  reason  has  been   given.  There  will  be  no
representation from the merged councils. Commissioners will be appointed by gift
of  the  government.  The  third change concerns the pegging  of  rates  over  a
three-year period.

A  number of issues arising  from  the Bill have been  dealt  with by the shadow
Minister  in  detail,  including the  right of  people to  have  a  say  in  the
determination of their  local government structure.  That  is a basic  principle
that has not been supported in the Bill or by the government  -- or by KPMG Peat
Marwick. The government, in its reliance on the KPMG audit report, says the only
issues for local government are purely economic; that delivery of human services
should  not  be  considered  and  it  is  not  important to consider whether the
structure is appropriate. The argument is simply economic.
But the most important issue is  was the  right amalgamation model put in place?
Most   people say no, it   was not the right model.   Of the Geelong people  who
support amalgamation, the overwhelming majority say the right model was not used
because the structure does  not take  the future into account. It is a structure
for today and it does not examine population trends in the future.

Within a short time, if projections are correct, the Geelong region will grow to
more than 300 000. Coastal communities such as Torquay have unique qualities and
efficiencies that  have not been  taken into account.  The amalgamation arguably
creates three  councils, which will not  be viable. Perhaps that was deliberate.
The amalgamation does not put  a regional planning mechanism in place to replace
the Geelong Regional Commission. There will  now  be  four  plans  instead  of a
single plan and a doubt exists about the cost savings that will be achieved. The
Cooper Lybrand report says:
  The result of our analysis is that we believe that if the single city proposal
  proceeded, there  would be long- term  recurrent savings through  economies of
  scale of about $1 million per annum. These would be offset by transition costs
  which  are very difficult to estimate, but might run at  about $3  million per
  annum for the first two years and about $1.5 million per annum thereafter. ...

  hence the proposed amalgamation is likely to incur increased costs rather than
  savings. It is clearly an unattractive financial proposition.
The differences in the  hierarchies of government  have  been spoken about,  and
questions have  been asked about whether savings will be  achieved, particularly
in the case of the GRC. I refer to an American study  Local Government Structure
and Performance:  lessons from America?  by  George A. Boyne,  which appeared in
Volume 70 of the Autumn 1992 edition of Public Administration, and states:
  The empirical evidence from the USA suggests  that fragmentation is associated
  with  lower spending and  concentration is associated with higher spending ...
  It is  concluded that  the creation  of a  single-tier system  may not lead to
  greater efficiency,  and that the advantages  of a two-tier  system  have been
  underestimated.

The abolition  of  the GRC is  a  major point in the  KPMG  report. Although the
report said the GRC's role has been completed, elsewhere  it  says that planning
is dynamic. How do those  statements relate to each other? KPMG has seen the GRC
only  in  its  statutory planning context but not in its other important  roles.
Initially the  commission  had a planning  function to consolidate  17  planning
schemes into one. The GRC did an excellent job on the planning scheme and is now
implementing  planning  control for  the  benefit  of  the  Geelong  region. But
planning is not its only function.
The commission has  49 staff, some of whom  are part time. It is  interesting to
examine the  wide range of skills  that the commission  staff  encompasses. They
range  from  town  planning,  economics,  demography,   architectural  drafting,
cartography,  geography, journalism,  graphic design, property management, civil
and chemical engineering,  accountancy and business advice and support. It  is a
unique body that has won international respect and praise.

In the 1990 book Regional Policy  in a Changing World the authors, Niles Hansen,
Benjamin Higgins and
Donald  J. Savoie, each  of  whom are at  different universities throughout  the
world, examine  regional policy in  Canada,  France, Great  Britain,  the United
States of America, Malaysia and Brazil. They also wrote about the GRC. They said
that in many places regional centres have not worked well, but that:
  More  effective  seems  to  be  Australia's  experiments  with   planning  and
  development  in  larger  regions.  A  good example  is  the  Geelong  Regional
  Commission.
  All in all, the Geelong Regional Commission has displayed an impressive degree
  of  that  very  entrepreneurial  and  managerial  talent  that  the   regional
  development branch found so woefully lacking in the rural centres programs.

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The record of the GRC stands it in good stead; it should be retained rather than
abolished. Since  its establishment in 1977  it has participated in the economic
development of the region. It has  been  responsible  for the attraction of $650
million  worth  of  investment into the Geelong region, which  has  led  to  the
creation of some 5130  new  job  opportunities.  It  has  also  helped  with the
expansion  of 111 local businesses. It has attracted 268 new companies into  the
Geelong area,  which have created 2864 new jobs. It has participated in regional
development and pursued projects of regional significance,  which are beyond the
normal capacity of private development.
  Mr Steggall -- That's its job!

  Mr LONEY -- Of  course that's its job and it does  it well. It should continue
to do so.

The  creation of  the National  Wool Museum  has been  praised both  as  a major
tourist attraction  in  Geelong and  because  it saved  a  significant  historic
building. After the collapse of International Harvester the commission purchased
the building to retain the foundry. Prospective buyers intended having it broken
down and shipped overseas. But the foundry is now operating again,  keeping jobs
in Geelong.
The  commission  has  participated  in  the  establishment  of seven  industrial
estates, all  of which  are well supported and used by local light industry.  It
also established  a bank of industrial  land that will facilitate the attraction
of major  development to the region such as the  BWK  wool scour. It has been an
advocate  and  representative for the Geelong region,  particularly  before  the
Industry Commission and most notably in inquiries into the textile, clothing and
footwear and vehicle industries.

In its submission on the vehicle industry the GRC  explored paths  that had  not
been explored  before, which has led to change in government policy. In hearings
before the Industry Commission the GRC argued that global policies have regional
impact and that  impact  has  been  more  difficult  in  Geelong  because of its
reliance on the vehicle industry, particularly  for its skills  base development
through  the  Ford  Motor  Company.  No other  Geelong  organisations have  made
representations of that  nature, or like  those which led to  Geelong's securing
the  Victorian Institute of  Marine Sciences and  the  Australian Animal  Health
Laboratory.
The Geelong Regional Commission was the major contributor when the route for the
standard gauge rail line was  being  decided.  It  won that contract for Geelong
when it looked as though the rail line would be built elsewhere. It was the body
that  presented the  submission,  worked  out the  plan  and was  generally  the
proponent for what is known locally as the Deakin wool stores proposal.

Tourism was also fragmented in Geelong. The Geelong Regional  Commission has set
out and  developed a coordinated approach  to tourism in the  area, particularly
through the establishment of Go-Tourism.
The GRC has a dedicated, able staff led  by Colin  Atkins, former  chairman, now
chief executive and, in particular, Gary Cowling, who has been secretary of  the
commission  since  the  Geelong  Regional  Planning  Authority days. Other staff
members who have  been there  and served the commission, have worked hard over a
long period to the benefit of the Geelong region. They are treated disgracefully
by  the Bill. In spite of the Minister's  statement in  another place  that they
would  receive fair and equitable  treatment with council employees, that is not
provided for in  the Bill. Should a staff member of the GRC apply for a position
with the new super council  and get the job a  current council staff member will
have the right of appeal.

Should the situation be reversed  and the position go to a current council staff
member, a former GRC staff member will have  no right of appeal under  the Bill.
GRC staff members  are not treated on the same basis as council  staff; they are
treated inequitably and shabbily. An  amendment will be moved at the appropriate
time which  I  hope  will  be supported. Without such people, the expertise they
bring and the functions that the GRC has carried out over the past years will be
lost. It is important that they are not lost.
Again I refer to the article in  the publication  Regional Policy  in a Changing
World which concludes:
  It may seem to some readers that an undue amount of space has been accorded to
  what is, after all, a  very small-scale program for the development of a small
  and not terribly important region ...

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I contest that point.
  However, the reason I  have covered the Geelong case in such detail is  that I
  am convinced that it is only through programs of this sort that  Australia can
  solve its tightly interwoven economic problems.
What are we  doing? We are throwing it away. We should be  retaining the Geelong
Regional Commission regardless of what is being done in other respects.
I turn to employment in the area. There will be 400  to 500 jobs lost in Geelong
if the Bill  is passed. Geelong has  experienced employment problems  in  recent
times. This is not  the  time to inflict such  measures.  The effect of the  job
losses would be the equivalent of taking out any one of the major  industries in
Geelong. It is hitting Geelong again in a manner it cannot afford.

The Bill neither lives up to its claims nor will it lead to a cohesive approach.
There is no regional plan as a consequence of the change.