Troy Pickard is president of the Australian Local Government Association (ALGA). He talks with Ruth Le Pla about the challenges and opportunities in his country and what local governments on both sides of the Tasman can learn from each other. Troy will be a keynote speaker at the LGNZ Conference in July.
Local Government Magazine: What are the big issues for local government in Australia right now?
Troy Pickard: One of our biggest issues is how we can meet the changing needs of our communities. We need to broaden our coverage to not just roads and infrastructure but also include human services.
Asset management is another significant challenge. We manage A$354 billion which is about a third of the non-financial assets across the three tiers of government in Australia. Recent studies have highlighted that 11 percent of our infrastructure is deemed to be in poor or very poor condition. So we have a significant backlog of work.
And dovetailed into that are our funding challenges. At the moment, 10 percent of local government revenue in Australia is derived from state and federal governments – predominantly federal government. Recently there’s been a freeze on indexation of our federal funding which has caused significant issues for local governments particularly in rural and remote areas. It has resulted in loss of staff, service reductions and closures of facilities.
What could we learn from you?
ALGA has worked very closely with LGNZ to share issues, challenges and opportunities and we have much to learn from each other.
In Australia, we do training of elected members and procurement very well. We’re working with LGNZ to assist them to better understand what our state associations do in those two areas in particular that could potentially be applied to the New Zealand environment.
Training is very pertinent here as we head into our local body elections later this year. What specifically do you think works well in Australia?
A large number of state associations that deliver the training, are getting into online environments. This is creating alternatives for non-metro-based local governments – which is the majority – to access training and improve their skillset.
It’s important that elected members broaden their understanding of the local government sector, good governance, financial principles, community engagement and how to manage the differences between the roles of elected members and administration. This last one in particular can cause friction and tension if not managed appropriately.
There’s no compulsory training for elected members but we do have a significant rate of participation in training nationally.
Could you give a ballpark figure?
In excess of 50 percent of elected members in Australia engage in some form of training. Some even participate in diplomas such as a diploma in local government.
Are you doing anything specific in procurement that you think we could adopt?
Our state and territory-based local government associations effectively tender on behalf of the sector for the procurement of products and services. That achieves several benefits. Firstly, it obviously generates some scale of purchase which reduces cost per unit. But, importantly, it actually reduces the cost of tendering – not only for local governments but also for the sectors wishing to engage with local government. There’s a significant cost factor in participating in a tender process: tens of thousands of dollars.
It’s a form of a prequalification process?
Yes. Individual councils can, if they choose, go through a formal tender. The state territory associations that are active in procurement effectively establish their own panels. They do that through a formal and public tender process that determines the suitability of an organisation but also sets the cost structure for an individual business. That entitles them to sit on that panel and they are then promoted actively throughout the sector as a panel member for procurement. Local governments can go straight to that panel to procure products and services without having to tender for that regardless of the tender regulation threshold at the time.
Are you suggesting that in New Zealand all local authorities could purchase collectively?
Absolutely, there’s an opportunity to do that. LGNZ could run a tender process that’s transparent and open to the market place. It would take three or four years to build your panel but you’d start with the products and services that are most used by local government such as motor vehicle fleets, trucks, plant and equipment and road resurfacing.
These are all major expenditure items in Australia and where there are significant volumes of purchase. I think that would apply in New Zealand too.
What I don’t know is what your tender regulations are. In Australia, if you procure services above a certain threshold – which is different in each state – you have to formally tender so there may not be a cost saving for the private sector or for local government.
But if you have regulations that force local governments to tender per job based on the dollar value, then there would be absolute value for everyone in having a procurement process that develops panels.
Have you spoken with LGNZ about this in practical terms – ie, whether they’d adopt something like this or not?
No. We’ve spoken in practical terms about training but I’m not aware of any advanced discussions on procurement.
On the procurement side, is there any downside for smaller suppliers?
Not really. Invariably, local governments in rural and remote regional areas of Australia have purchasing policies that favour local businesses. And even when these authorities engage in panels they have decision-making criteria that favour local content – which is absolutely crucial.
Under the panel system smaller businesses have to engage in the tender process only once. Then they’re in the game to have an opportunity to work on multiple contracts. So there are upsides for all parties regardless of size.
Any lessons that you could learn on your side of the Tasman from ours?
There are lots of lessons for us to learn from New Zealand – particularly in structural reform of local government. We don’t do that well here. Invariably, the sector is forced to reform by the state government. This causes friction and tension within not only local government but also the communities we serve.
In New Zealand reform has, no doubt, caused tension. But by all accounts it has resulted in a structure that achieves some broader objectives of scope and scale, and also ensures the local voice is heard.
We don’t have those layers in Australia. It’s a very raw structure here. You’re either big or you’re small and there’s not a great deal in between. We don’t have the community board advice structure and I think there are wonderful opportunities to do so.
The New Zealand experience of regional collaboration is another area that we can learn much from. We’re trying to encourage local governments to partner strategically across boundaries. Ultimately, that is a major incentive for the federal government to engage with local government on a regional scale rather than an individual scale.
The regional structures that you have – albeit focused on issues such as the environment – seem to work well. They could most definitely be applied in Australia, not just for the environment but particularly in how we manage our strategic road networks above and beyond our local road networks.
From my lens, from afar, the structure that is maturing in New Zealand local government makes a lot of sense and has areas of applicability here in Australia.
Why can’t local authorities get their PR right?
The challenge is that we have a message at a local level which is very different to our message at a national level. It’s a delicate dance catering to the needs of your local community but also being on par with the broader thrust of local government messaging and decision-making on the national stage.
Will local authorities ever be loved by ratepayers?
We shouldn’t try to position the sector so that we are loved. I think we need to be appreciated and valued by our community for the work we do on their behalf.
- Redacted from an interview with Troy Pickard.
LGNZ conference 2016
Troy Pickard will be a keynote speaker at the LGNZ Conference in Dunedin in July where he will be talking about the changing face of local government in Australia. He will share his ideas on the transformative economy, engaging and facilitating disruption, new technologies, and managing assets and infrastructure.
For more information: www.lgnz.co.nz.
The Australian Local Government Association (ALGA) is the national voice of local government in Australia. It represents 560 councils. ALGA is a federation of state and territory local government associations.
Troy Pickard has been involved in local government since 2001 and president of ALGA since November 2014. He is mayor of the City of Joondalup, a local government area with city status in Perth, Western Australia.
According to the Australian Local Government Association (ALGA), local government’s role in human services is complex and diverse, and interacts with the roles and responsibilities of other levels of government.
These services include local government’s involvement in local planning, coordination, funding and the provision of facilities, services and programmes across a wide number of areas. These may include: sport, arts and culture, recreation, childcare, aged care, libraries, drug and alcohol, housing and homelessness, maternal and child health and a wide range of community development activities such as community relations, social cohesion, health promotion and citizen engagement.
This article was first published in the June 2016 issue of NZ Local Government Magazine.