Investing in local councils will provide huge economic returns for the nation, Australia’s peak local government body says in a submission to parliamentary inquiry into the sector’s sustainability.

The House of Representatives Standing Committee on Regional Development, Infrastructure and Transport will on Friday hear from local government associations from SA, WA, Victoria, and the NT as part of it inquiry.

The Australian Local Government Association (ALGA) is expected to give evidence at a later date.

ALGA’s submission highlights the critical role of local government in providing essential services, managing public infrastructure, and supporting community wellbeing, and presents research showing ‘clear productivity and macroeconomic benefits of well-funded, financially sustainable local government’.

Giving local government an additional $350 million a year for quality open space would boost the national GDP by $858.9 million per annum, the submission says.

An increased regulatory capacity in planning and building would result in an annual saving of $859 million for development proponents and generate an additional $1.67 billion in GDP each year, and increased block transfers of Commonwealth funds to local governments could deliver efficiency and administrative cost savings of $236 million and would generate increase GDP by $330.8 million, it says.

ALGA also says reducing local government staff turnover can save $425 million in avoided costs and lead to a $619.9 million increase in GDP each year, while providing an additional $1 billion each year into the maintenance of local government roads would increase GDP by $354.6 million a year.

ALGA’s five key recommendations:

1. Increase FAGS to at least 1 per cent of Commonwealth tax revenue
2.  Establish a process for constitutional change that recognises local government in the Constitution.
3. Recognise the essential role of local government in achieving national priorities across productivity, improved community wellbeing, reduced inequality, environmental protection, circular economy, emissions reduction, emergency management, increasing secure well-paid jobs, and building a skilled workforce.
4. Give local government permanent membership on National Cabinet and all ministerial forums

ALGA says its analysis demonstrates clear positive economic gains can be achieved through increased investment in local government services, service delivery and workforce capacity.

“However, these economic gains do not come for free,” it says. “Local government needs long-term sustainable funding to ensure it can implement the services and programs required to realise potential productivity gains within their communities.”

Opportunity to hear about challenges, opportunities

Committee Chair Luke Gosling says the hearing will provide an opportunity for the Committee to learn more about the challenges and opportunities facing local governments.

‘Local governments play a vital role in supporting the economic, social, and environmental wellbeing of their communities,” he said.

“They are also key partners in delivering infrastructure and vital services that enhance regional development and affect communities, businesses, and people.

“The Committee is keen to hear from the local government associations about their perspectives and priorities on these issues.”

On Friday the Committee will also hear from the Department of Employment and Workplace Relations, Jobs and Skills Australia, the Department of Climate Change, Energy, the Environment and Water, and the Department of Finance.