12 March 1991 - Current
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.
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.
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.
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 ...
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.