A proposal to impose a national insurance levy on Council rates is "just silly" according to South Australia’s Local Government Association and should not distract from important national debates about disability reforms.

 

LGA President, Mayor Felicity-ann Lewis, said the Association had asked Councils for their reaction to the proposal made by the Productivity Commission in its draft report on Disability Care and Support.

 

"While we are waiting on feedback I have no doubt the proposal, buried in the report, to hit ratepayers for some costs for insurance related to injury will be rejected because it is just silly," she said.

"Communities have enough challenges to address with Council rates and don't need any more State or Federal imposts to cope with as well."

 

"We already have the NRM levy coming out of Council rates and residents are confused that Councils can't affect how that money is spent, when they pay it with their rates."

 

Mayor Lewis said that the draft report was an enormously important step to help the nation fix disability care and support arrangements which needed close attention.

 

"However they should look elsewhere for ways of funding injury insurance."

 

She said the report was not very detailed around what costs would be levied on Council rates but LGA's reading was that it could be as much as $20m in South Australia, alone.

 

The report suggested Councils were already subject to significant liability costs from catastrophic injuries where Councils were negligent, but this was simply not the case in SA.

 

Mayor Lewis said that SA Councils had been enormously successful in improving risk management over the past 20 years in areas for which Councils were responsible.

 

"We are worried that the report suggests Council rates help fund insurance for injuries where Councils are not at fault and in some instances where State Governments may have more responsibility."

 

She said the report picked up the Henry Tax Review's conclusion that Council rates were a highly efficient and simple tax. "That may be true, but communities also want accountability and transparency and Councillors can't be held accountable at elections for levies by other governments."

 

Mayor Lewis said the proposal also did not make sense as Commonwealth Financial Assistance Grants were insufficient to equalise Council capacity to serve communities. "This will reduce the capacity of many Councils to achieve their financial sustainability targets."

 

Mayor Lewis said the LGA was seeking feedback from Councils and would compile a submission to respond to the draft report by its April 30 deadline.

 

The Productivity Commission’s draft report on disability care and support is at http://www.pc.gov.au/projects/inquiry/disability-support.