In seeking to reconfigure our federation, first and foremost we need to strengthen local government. In doing so, we will empower councils to work together more effectively at the regional level. We must also overcome the problems confronting the diverse range of intergovernmental regional arrangements by making sure local government is at the centre – not the side – of these activities. We must empower local government to play a larger and fuller role in our governance arrangements by:

The need to find better regional governance arrangements is clear. Communities and councils in coastal regions are facing dramatic demographic change. Their problems are compounded by the fact that their populations are not only growing at a rapid rate, but are also ageing at a rapid rate (see Berwick this volume). In rural and remote areas, communities are crying out for a greater emphasis on regional development to generate robust economic growth and counter the drift of young people to the major metropolitan centres (as shown by Mal Peters in this volume). Meanwhile, councils on the fringe of major cities face particular difficulties as the rapid expansion of suburbia into the rural fringe has increased demand for public infrastructure (see also Gleeson this volume). These are just three issues of critical concern to councils that have a regional dimension.

So, how do we get a greater focus on the problems that confront our regions? Some advocate a two-pronged approach: first, abolish the States, and second, amalgamate local government into regional governments; and ‘hey presto – fewer spheres of government, better regional arrangements’. Unfortunately, this approach is fundamentally flawed. Despite our best wishes, the States are not going to roll over and die – at least, not in the short to medium term. More importantly, by merging local government into regional government you will destroy the one sphere of government that is genuinely part and parcel of our communities.

This does not mean that local government should not be prepared to reform, in order to better represent and serve those communities. Experience has shown that reform, accepted by councils and supported by communities, such as voluntary amalgamations, boundary changes, regional arrangements, shared services and doing things more collectively, achieves the best outcomes. However, it is clear from compulsory reform programs such as the State-imposed new boundaries in Victoria and South Australia, that reform based simply on ‘top-down’ ideas of amalgamation will risk the current benefits of local governments’ connectedness with the community, and may make them less, not more financially sustainable. In Victoria, 12 to 14 of the councils created through the Kennett government’s amalgamation program are now financially unsustainable. In South Australia, where the number of local governments was cut in half – to 69 – the indications are that about 29 of those are financially unsustainable. The decision by the Queensland Government in April 2007 to abandon its collaborative approach to reform with local government, and unilaterally attempt to impose new boundaries, is a backward step unlikely to achieve the benefits promised through a more considered partnership.

Local government reform is both a part – and a creature – of moving forward, therefore, all options for reform need to look beyond artificial financial indicators, and look at the ways in which communities change, and the ways in which they link and work together. There are eight or nine significant indicators for what makes ‘community’, not simply financial indicators and finances. Under any option, the existing strength of local government must be maintained and built, and local government’s great strength lies in the fact that is part of and close to the people. It is the most transparent, responsive and accountable form of democracy that we have. It can respond to local need in a way no other sphere of government can, be it regional, state or federal. Local government embodies the spirit of subsidiarity, a principle which holds that the functions of government should be exercised as closely as practicable to the affected citizens. Local government delivers services and facilities on a human scale. It is responsive to local need, provides local leadership and advocacy, fosters civic pride and reflects local priorities in a way state and federal governments never can.

So, how can we in local government address our lack of solid, regional governance arrangements? Local government already works closely together at the regional level in a number of important ways. Firstly, for example, for some years local government has worked together through Regional Organisations of Councils, that is ROCs (see http://www.alga.asn.au/links/regionalOrgs.php). ROCs provide an opportunity for councils to exchange ideas, develop a sense of regional identity, promote common objectives and share resources.

Secondly, councils also work together on specific projects. For example, in NSW, councils in the Hunter and Central Coast have developed a comprehensive regional environmental management strategy (http://www.hccrems.com.au/ about.html). This very successful regional initiative is being implemented through the collaborative efforts of fourteen councils to facilitate a regional approach to ecologically sustainable development. This has been achieved through a package of natural resource management initiatives. It encourages greater co-operation between member councils, state and federal authorities, industry and community groups, and it’s led by local government. Now regarded as a model for integrating local government planning and environmental management at the regional level, it provides a framework for co-ordinated action, addresses those environmental and natural resource issues that are best managed at a regional level, and facilitates regional partnerships and resource sharing to address key environmental management issues in a co-ordinated, pro-active and efficient manner.

A third example comes from Queensland, the South East Queensland Regional Plan and its accompanying Infrastructure Plan (OUM 2005; 2006), which together are considered an outstanding achievement for regional planning in Queensland and Australia. In short, these plans establish collaborative, top down and bottom up processes that will deliver tangible and lasting benefits for the region’s communities.

Finally, local government also participates in the development of better regional governance through direct partnership with Federal agencies. As recognised in the submission by the Department of Transport and Regional Services to the House of Representatives inquiry on local government and cost shifting, local government is central to regional development and the delivery of the regional policy objectives of the Australian Government on a national scale (SCEFPA 2003, p.91). As DOTARS recognised, local government offers a wide and well-established national network of public administration which may be capable of taking on extra responsibilities and functions, especially in rural and regional Australia. In some cases local government is the only institutional presence in small rural and remote areas. Its strong links to the community, accountability to the communities it represents and its legislative basis make it both durable and financially stable – unlike some community or interest groups. The integrated structure of councils can allow a high level of co-ordination between different activities; and the links between local government and local business and industry puts councils in a good position to foster a ‘bottom up’ approach to regional development. As DOTARS said, local government plays an increasingly important role in providing information to support Commonwealth regional policy development, and as a key stakeholder in the implementation of Commonwealth regional policy initiatives.