Growth ThreeSixty November 2015 06 Growing the City of Logan 08 Livingstone Shire Council’s bold plan Revitalising the Capricorn Coast 19 Defying the odds Ipswich growth outpaces nation ThreeSixty team Editor Troy Webb Journalist Dianne Reilly, Dianne Reilly Communications Design Wills Brand Design Welcome to the last edition of ThreeSixty for 2015. Our theme this time is ‘growth’ and we tackle some of the issues that impact regions experiencing population growth – the growing demand for infrastructure (see our article on PPPs), housing affordability and administrative transparency. After a slowdown in population growth in 2014, Queensland’s population is again on the rise and some parts of the Sunshine State are booming. According to the Australian Bureau of Statistics (March 2015), Queensland is third in terms of population growth at 1.3%, New South Wales is at 1.4% and Victoria is at 1.7%. Whilst our growth rate is slightly lower than the national average (1.4%), we continue to be one of only two states (along with Victoria) attracting interstate migration. Most of the state’s growth is centred in South-East Queensland, particularly in the Logan and Ipswich areas: councils we feature in this edition of ThreeSixty. We are also pleased to feature Livingstone Shire Council and thank Bundaberg City Council for their contribution. Providing some food for thought, we look at some global megatrends in development and residential design, and consider the option of ‘bundling’ together infrastructure projects to attract private investment. The Commonwealth has put the spotlight on Northern Australia once again with the release of their White Paper, “Our North Our Future”. We consider, what does this mega-policy document mean for our Northern Councils? Again, we are pleased to bring you a message from the Deputy Premier and Minister for Infrastructure, Local Government and Planning, Jackie Trad. We welcome the announcement of the catalytic infrastructure fund and wish communities and councils in Central Queensland who are still rebuilding after Cyclone Marcia all the best for a speedy recovery and a better year ahead. And to our councils and communities in drought affected areas, we wish you rain and prosperity over the coming months. As always we welcome your ideas and story suggestions and contributions and remind you that we are always here to lend an ear or a hand. Troy Webb Partner and head of McCullough Robertson’s Local Government Industry Group Welcome to the seventh edition of ThreeSixty. CONTENTS 02 Funding for councils to build infrastructure and create jobs 03 Growing pains 06 GROWING THE CITY OF LOGAN 08 LIVINGSTONE SHIRE COUNCIL’S BOLD PLAN TO REVITALISE THE CAPRICORN COAST 10 Are your decisions crystal clear? 12 A blueprint for the future or just more white noise? 15 Public project private money 18 New software provides solution to procurement problems 19 DEFYING THE ODDS Ipswich growth outpaces nation 22 Growth means emissions also grow ThreeSixty : Growth 1 Deputy Premier and Minister for Infrastructure, Local Government and Planning Jackie Trad, said the state government will fund shovel-ready infrastructure projects to upgrade vital infrastructure and ensure communities are better prepared to face natural disasters. “We’ve received a large number of proposals from councils for the $63 million in grant funding, highlighting their appetite for projects that create jobs and better connect communities,” Ms Trad said. “Councils understand – like I do – that local initiatives mean local spending and jobs, providing the biggest boost for regional economies. “With more than 80 percent of Queensland droughtdeclared, these projects will not only sustain communities doing it tough but help them grow and prosper.” Ms Trad said a key focus of her fi rst seven months in offi ce has been to ensure Central Queensland gets back on its feet following Cyclone Marcia. “I will never forget visiting Rockhampton and Yeppoon in the days immediately after Cyclone Marcia slammed the Central Queensland coast and seeing the damage fi rst-hand,” Ms Trad said. “I want to acknowledge the remarkable work done by local councils to assist their communities, particularly in the initial aftermath of the disaster, when many residents were facing signifi cant physical damage and emotional trauma. “I know that the recovery is ongoing, which is why I fought hard to ensure our government’s fi rst budget included $40 million just for Central Queensland. “Livingstone Shire Council and Rockhampton Regional Council have wasted no time in making a start on their iconic projects with plans to create beautiful riverbank and foreshore re-developments. “These projects will not only improve infrastructure in the region, but provide an economic boost, supporting around 400 construction jobs across both projects. The Palaszczuk Government lobbied the Commonwealth to allow local councils to use day labour for reconstruction works. “We understood that a signifi cant obstacle in recovery efforts was the inability for councils to claim the cost of using their own internal workforce to undertake reconstruction works,” Ms Trad said. “The Palaszczuk Government understands that day labour is often the best value for money option to get the work done and ensure communities are in a position to quickly rebuild. “Fortunately, because of the strong campaign from councils and advocacy from the Palaszczuk Government, the federal government fi nally approved the use of council day labour under the Natural Disaster Relief and Recovery Arrangements (NDRRA) guidelines for the years 2014-2015, 2015-2016 and 2016-2017. “This decision was overdue, but I am pleased that councils now have the certainty they need to get on with the job of rebuilding. “I will continue to fi ght to see day labour funding become a permanent feature of the NDRRA.” Funding for councils to build infrastructure and create jobs The Palaszczuk Government is delivering $63 million in the 2015-16 State Budget to help councils protect against natural disasters and plan and build for the future. Jackie Trad MP Deputy Premier, Minister for Transport, Minister for Infrastructure, Local Government and Planning, and Minister for Trade These projects will not only improve infrastructure in the region, but provide an economic boost, supporting around 400 construction jobs across both projects. 2 ThreeSixty : Growth If the current growth rate in urban living continues, by the year 2050 it is estimated that more than seventy per cent of the population will live in urban areas. That is approximately double the current urban population taking into account global population increase.* Urbanisation, particularly at this rate of increase, brings with it many issues, including the psychological impact of loss of ‘space’ and connection to nature, as well as living closer to other people in a physical sense, but often further away in an emotional one. Group Design Director at Place Design Group, Finn Jones, says in modern cities time and space are two of the greatest urban commodities. The way we plan, confi gure and develop our cities for now and into the future has an impact on how much time and space we have as individuals and communities. “Managing urbanisation and managing it well means more than reacting to hype and simply increasing density in certain areas,” Finn says. “The suburbs are derided by professionals for their sprawling nature and lack of urbanity. Yet increases in density and urban services are focussed on already intense metro areas or designated centres, leaving the suburbs and other parts of the city under-serviced and disconnected. “Yet it’s the suburbs where a large percentage of urban residents desire to live and space is the key to this desire.” Finn says the economic and governance rationale of modern cities is driving a short-sighted methodology and cities are in danger of building people out of them – humans just aren’t designed to live in dense concrete jungles. “There is a direct link between urban improvements and urban development – if done well,” he says. “However urban improvements and urban spaces are often designed without a genuine understanding of what humans really need or want; rather they are a product of engineering requirements, strict rules and governance controls. The result is a space for everyone but a place for no one.” GROWING PAINS URBANISATION AND DEVELOPMENT TRENDS Development trend MICRO-LIVING Strategy Director at Place, David Grant, agrees that humans seek community, not isolation. One of ten trends presented in the 2015 Place Report, ‘Micro-Living’, could provide an answer for councils needing to increase density, whether within a CBD or on the outskirts. “People generally want to live in a “town centre” environment”, says David. “They want to be in the thick of things, enjoy activities and company, and be part of what’s going on, particularly in the latter stages of life. Social connections are important to psychological well-being.” Micro-living, denoting small one or even no-bedroom residences with minimal kitchen facilities but utilising innovative luxury fi ttings and fi xtures, is generally more suited to singles, younger couples (pre-children) or empty-nesters (pre-retirement village age). There’s not as much demand in Australia as overseas as we lack the density of population and we have plenty of space available outside of most urban areas. 1 David Grant Strategy Director, Place Design Group Finn Jones Group Design Director, Place Design Group ThreeSixty : Growth 3 *United Nations & World Health Organisation and Population Reference Bureau. Development trend MICRO-LIVING ...continued “The onus is rightly on developers,” he says. “If they want to create the change they have to justify their case. “Councils are very wary of dense residential developments with communal spaces that are left to deteriorate once the developer has left the site or the management plan has expired,” he says. “Councils want to know how the development will look in fi ve, ten and even twenty years. “This type of longer-term ownership tends to work better in mixed-use developments where longer-term management plans and ongoing developer contributions make fi nancial sense. “The question for councils is how to cluster housing in new builds to enable that social experience and minimise isolation, not just now, but in the longer term.” How relevant are our town plans? Finn says planning schemes are too often governance based; using rules and circumstances of the past to defi ne or restrict future direction. Rather than being visionary, the rules prescribe certain things deemed to be acceptable based on past experience. These rules make it hard to adapt to our ever intensifying urban environment and its complex issues. “Often we are seeing that many of the old planning tenants and statutory rules are erroneous in modern cities,” Finn says. “Governance dictates what we do and what we build based on the most common denominator or at best, a compromise. “We can get so lost in the rules and the way things have always been done that we don’t ask ourselves how people will live in the city in fi fty years. “Take for example the reliance on historical building setback provisions in urban environments. How does a one-and-a-half metre setback from the boundary improve someone’s life? “Another strange omission in plans and thinking is the revision of suburban heights. “Compact living requires innovative solutions to ensure that natural light and ventilation can be achieved with outdoor useable spaces. “Yet planning schemes restrict the heights of dwellings rather than allowing for three or four storeys where there is a compact footprint. These sorts of provisions would allow us to live the way we want and need to – achieving refuge in our homes as well as functionality that matches our family arrangements.” The rapid development of technology is continuously defi ning and redefi ning the way people live, work and play. The use and adoption of technology is unwittingly shaping urban environments. Finn says the challenge for planners is to ensure that planning schemes remain relevant and are not out-of-date or out of step with human need before they are even introduced. “The future of our cities is in the optimisation of our suburbs and the connection of them back to the city centres – not the narrow clustering of higher and higher density zones.” 1 4 ThreeSixty : Growth Development trend CONSCIOUS ENVIRONMENTS A spin-off of sustainability, “conscious environments” take into consideration the people within the living environment and the importance of providing them with a positive psychological and physical experience. David says that combined with microliving, conscious environments are an opportunity for councils to cater for the growing number of baby boomers and cashed-up self-funded retirees. In this global trend, developers are creating residential communities that consciously support physical and emotional wellbeing with facilities such as libraries, gyms, pools, club rooms, large green and open spaces, community gardens, observation points, performance stages, shops and restaurants. “These kinds of developments can enable people to stay in their local area – for example, empty nesters looking to downsize from large homes or acreage living with their high maintenance requirements and empty rooms,” David says. “Often there just aren’t these options available in the area and even moving ten to fi fteen kilometres away can be unsettling if all their friends and community connections have to be left behind.” David says this style of development is working well in South-East Queensland and capital cities but he believes there is potential for direct application across the country. “The issues and challenges for local government and legislators are around architecture and design,” he says. “These kinds of developments can be aesthetically different from what we are used to, but councils need to consider the potential benefi ts. “By embracing these sorts of developments, which are more high density, we are not ripping out the social fabric and heart of a community but keeping active people who contribute to the community in the town or neighbourhood.” Development trend CURATED DESTINATIONS A new direction in urban renewal, curated destinations combine commercial and residential facilities in creative and organic ways to produce places that people actively choose to visit because they offer a discernible identity and experience. Curated destinations offer layers of experience above and beyond living and shopping, such as cooking classes above an organic food market. The extra elements of the experience are often spontaneous and organic, driven by the connectivity of the local business community. David says there are very few examples of this type of ‘curated place’ in Australia as councils are hesitant to hand over creative control and are more concerned with risk minimisation. “These can become tourist destinations in themselves, providing value for councils by supporting and encouraging innovation in development at no cost to council but with signifi cant potential benefi ts,” he says. “They could work well in regional centres where there is a stronger sense of community and local identity and there is more interdependence across business relationships. “Councils can use curated destinations to activate vacant land and shopfronts. They can assist in visualisation and promotion and encourage or appoint a local ‘curator’. “The local curator is well known in the community and has the existing relationships needed to create these spaces.” David says increased tourism is the obvious benefi t. People are more likely to visit a place if they believe it has something different and offers a unique experience, such as a strong sense of community. The Eumundi markets on the Sunshine Coast are a good example of a curated destination that has become a tourist destination. “Curation is about what we are and how we present it to people. There needs to be a range of experiences for a range of ‘spends’. We are quite fortunate in that we have so many distinct local communities and we should be more confi dent in how we present ourselves.” 3 2 People are more likely to visit a place if they believe it has something different and offers a unique experience, such as a strong sense of community. ThreeSixty : Growth 5 The future of our cities is in the optimisation of our suburbs and the connection of them back to the city centres – not the narrow clustering of higher and higher density zones. Prior to the Queensland local government amalgamations, Logan’s boundaries covered a highly urbanised 229 square kilometres with a population of about 170,000 people. Once the new boundaries were in place, the City of Logan stretched south to include communities that were formerly part of the Gold Coast and Beaudesert Shire councils. Overnight, Logan became the sixth largest local government area in Australia, growing to an area of 957 square kilometres that was 80% rural. The City of Logan is now Australia’s fi fth largest local government area. Today, the City of Logan’s population stands at around 306,000 people and is forecast to exceed 500,000 people by 2031. Logan’s Mayor, Pam Parker, says one of Logan’s great assets is its location and connectivity to jobs in Brisbane, Ipswich and the Gold Coast. “Families looking for larger sized lots and lifestyle can fi nd them at affordable prices in the City of Logan,” she says. “We are planning for 120,000 new people living in 70,000 dwellings and working in 50,000 new jobs by 2031.” That growth will occur on green fi eld sites located in two new satellite cities, Greater Flagstone and Yarrabilba. Both satellite city developments will include new town centres, commercial districts and schools. “These two new communities will anchor the southern end of the City of Logan,” Mayor Parker says. “The challenge for all tiers of government and the private companies building these new communities is to ensure development in our city is strategically planned and delivered. “I think the wider vision for growth in Logan, in terms of having urban centres at its edges and swathes of rural, semi-rural and conservation land at its heart, achieves a good balance. “New industries and jobs will need to closely follow the new residents who settle here. “Employment decentralisation and the delivery of major infrastructure will be necessary to avoid our new communities becoming isolated communities. “To achieve that, Logan will continue to work with the state and federal governments to advocate and secure funding for community infrastructure projects that will underpin our continued growth.” In terms of major infrastructure, Logan Water Infrastructure Alliance is a public and private sector enterprise involving Logan City Council, Downer, Cardno and WSP Parsons Brinckerhoff. Established in July 2015, the alliance supports Council’s water business in the areas of asset management, planning, design, project delivery and organisational development. Council has been instrumental in the planning and release to market of two large mixed use industrial/commercial development precincts with the potential to deliver up to 3,000 new jobs in Logan, once fully developed and tenanted. Greater Flagstone and Yarrabilba’s masterplans contain a combined total of 480ha of land available for industrial, commercial and retail activity to encourage business investment and job creation for the families who will call the new satellite cities home. “Our existing urban centres are also a focus for future growth so that green spaces are retained in the heart of our city,” Mayor Parker says. “There will also be opportunities for infi ll development in the more established, urban communities in the northern parts of Logan that border with Brisbane, Ipswich and Redland City councils, such as Beenleigh, Springwood and Park Ridge.” Mayor Parker says Logan City Council is well positioned to respond to the demand for development growth. “We have cut red tape and the latest numbers on development approvals in Logan demonstrate that,” she says. GROWING THE CITY OF LOGAN March 2008 was a game changing month for the City of Logan. Our city has undergone great transformation and we now stand as Australia’s fi fth largest local government area by population, with over 306,000 people calling the City of Logan home. That growth will occur on green fi eld sites located in two new satellite cities, In terms of major infrastructure, Logan Water Infrastructure Alliance is a public THE CITY OF LOGAN March 2008 was a game changing month for the City of Logan. 6 ThreeSixty : Growth A TIRELESS PROMOTER OF THE CITY OF LOGAN, MAYOR PARKER REFLECTS ON HER TIME IN OFFICE. She will retire from the position at the next election. What was your most important achievement? In refl ecting on my early years as Mayor, the greatest achievement was certainly overseeing Local Government amalgamation and successfully bringing three regions and policies into one over many years. Logan grew from a city of just 29 suburbs to a newly amalgamated city with 64 suburbs – an increase of 314% in land mass and 42% in population. What are you most proud of? I will always recall a woman saying to me, “I am alive today because you cared when no-one else did”. This is something I will never forget. As leaders, we must be prepared to walk in other people’s shoes, be good listeners, be compassionate and help others in their time of greatest need. During my fi rst term, one of the achievements I am most proud of is the 180 degree turnaround of what was one of the worst performing DA processes in the state, to one that became the best – taking out many awards and setting the benchmark for best practice, thanks to the talent and tireless efforts of a fresh DA team. In my second term, I convened the 2013 Logan: City of Choice Summit to address various challenges facing our city. Of the many City of Choice outcomes delivered over the past two years, the one of which I am most proud, is the Logan Together initiative which has the potential to change the life of every child in Logan. This ground-breaking initiative aims to coordinate across all levels of government and agencies to make sure we are better placed to ensure every child in Logan, from birth to eight years of age, reaches key child developmental milestones. How has the region changed since 2008? Our city has undergone great transformation and we now stand as Australia’s fi fth largest local government area by population, with over 306,000 people calling the City of Logan home. We are also now home to a thriving economy, powered by more than 20,000 businesses employing over 72,000 people. Our city’s economic output recently topped a massive $20.1 billion and our jobs growth continues to outperform many of our neighbouring regions. How has local government changed over this time? Local Government is truly the people’s government and our communities rely heavily upon us for their lifestyle. However, with fi nancial challenges at a state and federal level, the delivery of infrastructure for cities throughout Australia is becoming increasingly diffi cult. This is particularly pronounced in Logan which is experiencing rapid growth through two satellite cities currently under construction, which will be home to over 200,000 new residents by 2031. This is all in addition to the extra pressures placed on councils through the increased devolution of responsibilities thrust upon us without the commensurate fi nancial support from other levels of government. “We’ve gone from being considered the worst in the state for approving development at the time of amalgamation in 2008 to being one of the best. “In the 2014/15 fi nancial year, 99% of the 1061 development applications received by Council were decided faster than the statutory timeframes.” Coupled with its prime location, the City of Logan has earned a reputation for being “open for business”. The area is quickly becoming the hub of logistics and transport for South East Queensland and the aged care, education and tourism sectors are also growing. “The Logan Offi ce of Economic Development has attracted almost $155 million of new business investment to the city over the past 12 months,” Mayor Parker says. “Our location between two major population centres and beside a key north-south transport route has already attracted large employers in the logistics and freight industries such as Ceva and Toll. “To drive the jobs growth we need to support our growing population, Council has facilitated the development of two signifi cant mixed use/industrial/ commercial precincts in Logan, known as SouthWest 1 and SouthWest 2. “SouthWest 1, in Browns Plains, is a 40 hectare mixed industry and business precinct, which has attracted high quality green commercial tenants. “Once fully developed and tenanted, it is expected to create up to 2,000 new jobs. “Meanwhile, Council recently sold a 21-hectare site in its SouthWest 2 development in Berrinba to pave the way for a new industrial park, which is expected to create a further 1,000 jobs. “The City of Logan is growing every day, and so are the opportunities for residents and businesses.’ Mayor Pam Parker ThreeSixty : Growth 7 In February this year, parts of the Livingstone Shire suffered one of the region’s worst natural disasters in living memory, when Tropical Cyclone Marcia crossed the coast just north of Yeppoon leaving a trail of destruction in her wake. Fast-forward just seven months later and Council is on the cusp of transforming the region into one of Australia’s premier coastal destinations and a bona fi de tourism hot spot. The centrepiece of this transformation is the Revitalisation of the Yeppoon Foreshore and Town Centre; a staged $53 million dollar project incorporating new tourist attractions, critical road and pedestrian connectivity and park infrastructure in a spectacular beachfront setting. The earlier Stages 1 and 2 of the project comprising picnic areas, open-air major events amphitheatre, beach front promenade, Spirit Stone Monument, and shared pedestrian linkages were progressively completed between 2003 and 2008. However, it’s the next three proposed stages that have the region buzzing – incorporating an amazing ‘sea creature themed’ zero depth water feature, stage and amphitheatre upgrades, and enhancements and a strategically positioned 350-bay multi-storey car park that’s just two minutes’ walk from the beachfront redevelopment. Other proposed elements include a major lagoon-style water feature, street scaping and place making elements, public art and a host of other tourist and recreation features. Council successfully lobbied the State Government for a combined $29 million in funding for Stages 3, 4 and 5 and is hopeful of securing a further $10 million through the Federal Government’s National Stronger Regions Fund. Mayor Bill Ludwig said these next critical stages of the Yeppoon Foreshore Revitalisation will be a defi nitive game changer for both the Capricorn Coast and Central Queensland region. “This signifi cant investment that Council is undertaking in partnership with the State Government and hopefully the Federal Government, will be a massive boost to reinvigorate the region’s tourism industry and will also prove a major catalyst for generating new private sector investment in tourism and accommodation infrastructure,” he said. Livingstone Shire Council’s bold plan to revitalise the Capricorn Coast 8 ThreeSixty : Growth Cr Ludwig recently wrote to new Prime Minister Malcolm Turnbull, seeking the Federal Government’s commitment to support the revitalisation plan and outlining the importance of the project to the region’s post cyclone-recovery effort and long term economic growth and diversifi cation. “Prime Minister Turnbull has previously been a great supporter of this region when, in 2007 as Minister for the Environment and Water Resources, he provided $16.6 million of Federal funding toward the $50 million Yeppoon to Rockhampton pipeline,” Cr Ludwig said. ”That timely investment effectively drought-proofed the Capricorn Coast and ensured the region could continue to grow sustainably while delivering major environmental outcomes for both Waterpark Creek and Sandy Creek catchments. “The revitalisation of the Yeppoon Foreshore will be another huge economic driver for the region.” Indeed, a recent study released by Central Queensland University indicated the project will create 260 immediate construction jobs and a further 681 long-term tourism and service industry jobs on the Capricorn Coast. The study also forecasts the project will trigger a 20% increase in the number of visitors to the region, injecting up to $6 million a year into the local economy and $60 million regionally. Council has now launched extensive community consultation to identify the features the community wants to see included in the revitalisation of the Yeppoon Foreshore and Town Centre. Information gathered from the consultation will be passed on to the urban design team which will be appointed next month to fi nalise the detailed master plan. Major construction of supporting trunk infrastructure, including the reconfi guration of access roads and multi-storey car park is expected to be well underway by March 2016. Plans are also in motion to revitalise the southern end of the Capricorn Coast, with the release of the Draft Emu Park Foreshore Concept Master Plan, including the $2.25 million second stage of the spectacular Emu Park Centenary of Anzac Memorial. “The fi rst stage of the Anzac Memorial has proved immensely popular since being commissioned in April this year and will form part of an overall 1.5km walking trail that links the Kerr Park in the south with Peace Park in the north, through to the beautiful Bell Park and the town’s business centre,” Cr Ludwig said. “The proposed scope of works will incorporate an extension of the headland boardwalk to link Fishermen’s Beach and the Singing Ship monument which Council aims to have completed in time for Anzac Day 2016.” The Capricorn Coast has consistently rated as one of Queensland’s faster growing areas outside the Southeast corner, boasting an average annual growth rate (over most forecast period) of between 2.5% and 2.9%, well above the state and national average. Previous stages of these revitalisation projects have already proved a major investment catalyst, attracting more than $120 million in private sector developments so far including Echelon, Oshen and the soon-to-be opened Salt development. There is already an estimated $75 million in additional private sector developments expected to get underway in the near future, as a result of the announced further stages of the Yeppoon Foreshore Revitalisation Project. “These private sector projects will also provide hundreds of local jobs through trades and contracting services, as well as fl ow-on retail, dining, tourism and accommodation jobs in the long term,” Cr Ludwig said. “Despite facing some major challenges, including de-amalgamation, natural disasters and the decline of the resources industry, Livingstone Shire has continued to move forward. “It is a defi ning period for the region as we rebuild and establish the Capricorn Coast as a key tourist and lifestyle destination to live, work, play and invest.” Mayor Bill Ludwig ThreeSixty : Growth 9 WHAT DOES TRANSPARENCY MEAN IN LOCAL GOVERNMENT? More than ever before, the public expects that public agencies will operate fairly and that government has the systems in place to ensure that it happens. It is important to understand that administrative transparency applies to local government decisions, just as it does to state government. Queensland legislation and administrative practices strongly favour transparency. As an example, under the Right to Information Act 2009 (Qld) (RTI Act), decision makers must give written reasons for certain decisions given under the Act. In an external review of a decision under the RTI Act, if the information commissioner considers the reasons given by an agency or council are inadequate, the commissioner can require the agency or council to provide an additional statement containing further and better particulars of the reasons for the decision. Government transparency can be defi ned as free access (as in unimpeded and zero to limited cost) to: public information held by government agencies, and the procedures for, rationale of, and deliberation about making public policy, law and administrative decisions. While the impetus is for greater transparency, too much transparency can cause real problems for local councils and their constituents. Local government continues to grapple with the best way to strike a balance between good process and timely decisions and it is easy to see why once you take a moment to consider the positives and negatives of transparency. There is no doubt that transparency is a fundamental component of a democratic society. There is a balance to be struck between making information freely accessible and avoiding the issues associated with a process being weighed and slowed down by the need for transparency. ARGUMENTS FOR TRANSPARENCY Transparency leads to: better decisions: public participation in the decision-making process assists with information gathering (e.g. useful information will usually come from interviews and discussions with the people affected by the decision). Obtaining relevant information is crucial for good decision-making fewer complaints: the quality of an administrative decision is dependent on the decision-maker’s knowledge, experience and integrity. Undertaking a decision-making process that is open and consultative is important, especially where particular members of the community are affected by a decision, such as a planning decision. If a council can establish a reputation of being open, accountable and fair, there are likely to be fewer complaints about the decisions made. Transparency also deters corruption and increases accountability, empowers citizens to be involved in the process and can be relatively inexpensive and quick to implement. Transparency is far less onerous and daunting than other long term initiatives aimed at reforming administrative practices. Transparency also increases confi dence in the system. It gives members of the public, particularly rate-payers, confi dence that the decision has been reached through a process that is openly examined and involves scrutiny of all the available evidence, regardless of whether the result is universally accepted. ARE YOUR DECISIONS CRYSTAL CLEAR? Transparency increases confi dence in the system. It gives members of the public, particularly rate-payers, confi dence that the decision has been reached through a process that is openly examined. 10 ThreeSixty : Growth ARGUMENTS AGAINST TRANSPARENCY The most obvious challenge of transparency is delay associated with the process. Responding to requests for information from members of the public and engaging in discussions with stakeholders takes time. As an example, the Sustainable Planning Act 2009 (Qld) requires local governments to make a long list of documents relating to planning and development matters available for inspection and purchase. Members of the public can also apply for planning and development certifi cates, which require Council to compile documents relating to planning and development matters in respect of specifi c properties. These obligations can be very onerous, particularly for smaller local governments with modest resources. What if a council’s policy plans are prematurely disclosed? There is the potential for good ideas to be burnt in the media in circumstances where the ideas are not fully formed. Sometimes not all information is provided, or the information is delivered out of context and sometimes not all the information is known. Sometimes decision-making requires isolation from the pressures of public opinion and scrutiny. Can the objective, open and honest consideration of alternatives, consequences and reasons for policy and law, from the very starting point, be done by offi cers who are conscious of being observed and potentially challenged by the public and media? Peter Stokes,, Partner [email protected] Transparency can arguably lead to unreasonable self-censorship by pushing council offi cers to pursue alternative, unoffi cial and hidden ways of communicating and restricting their capacity to engage in free and open evaluation and deliberation. IMPLICATIONS OF TRANSPARENCY One of the most important implications of increased transparency is the need for accurate records. Accurate record keeping is the key to good administrative practice. The Public Records Act 2002 (Qld) (Public Records Act) requires public authorities to: make and keep full and accurate records of its activities, and have regard to any relevant policies, standards and guidelines made by the archivist about the making and keeping of public records. This includes oral communications (phone calls), written communications (emails and faxes) and events and actions (internal and external meetings). Good record keeping improves decision-making by providing decision-makers with detailed information on which to base their decision and assists decision-makers to prepare a detailed statement of reasons if necessary. It also enables a council to establish how a decision was made in the event the decision is challenged or subject to a review or appeal. To ensure transparency: all information relevant to the decision-making process should be the subject of written records records should be maintained centrally electronic records should be captured and stored centrally – not on individual offi cers’ computers records should be contemporaneous, and offi cers should always act professionally and objectively with stakeholders. Councils should consider whether their processes meet the test of transparency and, if not, the risks and rewards – both for productivity and from a political perspective – of any variations to those processes. Amelia Prokuda, Senior Associate [email protected] ThreeSixty : Growth 11 The White Paper considered over 500 submissions to the Green Paper released twelve months ago, including submissions from councils. Also considered were the Joint Select Committee’s report Pivot North: Inquiry into the Development of Northern Australia: Final Report (Pivot North) and the Northern Australia Infrastructure Audit, produced by Infrastructure Australia and the CSIRO. While the white paper has been generally welcomed for putting the north under the spotlight, the largely aspirational nature of the policy framework has been criticised for lacking detail and clarity. Rockhampton Mayor Margaret Strelow told the Morning Bulletin (19 June, 2015) that she would not give the white paper an A and that she would like to see some of the region’s projects costed and specifi cally mentioned. “It’s delivery of projects that matters,” Cr Strelow said. The mechanism for project delivery appears to hinge on the $5 billion Northern Australia Infrastructure Facility – a concessional loans scheme for projects such as airports, ports, rail, roads, energy, and water and communications infrastructure. The Facility will be administered by the Treasury, with projects to be assessed by the relevant Commonwealth department (e.g. the Department of Infrastructure and Regional Development for a transport project) and, if appropriate, by Infrastructure Australia. The eligibility criteria are still being developed, however, from what has been released to date, it is clear that to be eligible projects, must have other funding sources (such as private investment) and be capable of repaying the Commonwealth’s loan. They would also have to be projects that would not otherwise have been constructed, i.e. the Commonwealth will not lend to projects that are commercially viable without government assistance. A blueprint for the future or just more white noise? In June this year the Commonwealth Government released a blue print for developing the North of Australia: Our North, Our Future: White Paper on Developing Northern Australia. Billed as an action plan for the development of the Northern Territory and areas of Western Australia and North Queensland, north of the Tropic of Capricorn, the paper has received mixed reviews from State Governments and affected councils. 12 ThreeSixty : Growth Townsville Mayor Jenny Hill says there are many questions around the infrastructure loans scheme and is disappointed that the city’s submission to the green paper (made in 2014) was not included. “On the whole, it is a grand plan lacking detail and clarity, particularly around the infrastructure loans fund,” Cr Hill said. “The white paper states that it won’t be available for projects that would be commercially viable without government support, so how does that impact projects that may already be in the pipeline? “We need to know how the fund will operate and just what is being considered. “We don’t know what the interest and repayment plans will be and there isn’t enough information available on the points of contact and how to access the fund.” Cr Hill welcomed the reference to the ‘beef roads’, which will support development of a local abattoir and boost employment, along with other infrastructure in the region that will benefit the city of Townsville. “Townsville City Council will work in partnership with Townsville Enterprise to identify projects and access funds to deliver infrastructure that may not necessarily be within the Townsville City area, but will still benefit the city and its residents,” she said. “This includes roads out to the west of the city and improved water supply, not only for residents but for mining operations which in turn boost the region’s economy. “Water infrastructure is absolutely crucial here in the north and is one area that needs to be better managed. “Government needs to realise that it has to support water infrastructure projects if it wants to attract private investment. “The Burdekin dam is a good example. The benefits to the Townsville region have been immense and yet there was no mention of stage 2 in the white paper.” Cr Hill is pleased to see the Office of Northern Australia relocate to northern Australia (the head office will be based in Darwin with a satellite office in Townsville). “We would like to see a Townsville person in the office to ensure the region is not ignored and our interests are prioritised,” she said. “The cooperative research centre is something we truly do support. “We recognise that many of the aspirational aspects of the paper can’t be achieved without significant improvement in the education and health of people in the north. “The Office will provide an opportunity to pull together all the data on Northern Australia and it provides a “hub and spoke” approach, with other centres in places such as Broome in WA working together to pool data and then bringing that information to government to better inform policy and decision-making. “We can return to government tenfold what they put in, if funding is directed well.” We recognise that many of the aspirational aspects of the paper can’t be achieved without significant improvement in the education and health of people in the north. ThreeSixty : Growth 13 Mackay Mayor Deirdre Comerford said implementation would determine how benefi cial the new action plan for developing Northern Australia would be to regional centres. “Policy intent is one thing – implementation is another,” Cr Comerford said. Cr Comerford said it was pleasing the Federal Government was focusing on Northern Australia and there were some good parts to the White Paper, but that it lacked clarity on major projects for the north. “At the risk of being parochial, Mackay as a major service centre and region doesn’t even rate a mention,” she said. “It feels as though we haven’t been taken seriously and that is disappointing when you consider what we can and do deliver to Australia’s economy.” “The Mackay-Isaac and Whitsunday region Gross Regional Product is $22 billion with productivity 62 per cent higher than the Queensland average. “The region is well placed to capitalise on many aspects of this visionary blueprint and this can be achieved through collaboration between government and the private sector.” Regarding the $5 billion concessional loan facility, Cr Comerford agrees with Cr Hill that the fund has merit but that more detail is needed on the mechanics, accessibility and repayment plans. She said the announcement of a $75 million Cooperative Research Centre for Developing Northern Australia was a huge positive. “Education holds the key to delivering many of the short and long term objectives of this paper,” Cr Comerford said. “The blueprint looks to provide the impetus for Northern Australia to reach its potential and hopefully with meaningful partnerships, results can be achieved quickly.” The Palaszczuk Government has hosted a number of Economic Roundtables across North Queensland and has been working closely with the business community, peak bodies, local governments and other regional stakeholders to identify where the best opportunities for economic development may lie. Minister Assisting the Premier on North Queensland, Coralee O’Rourke and Premier Annastacia Palaszczuk also hosted a forum for North Queensland Mayors in Townsville in October, which identifi ed regional priorities that could be pursued through the White Paper process. “These initiatives are the fi rst step in a renewed partnership between local and state governments, and will contribute to identifying up to fi ve projects to champion over the next three years,” Minister O’Rourke said. “The ideas generated at the roundtables will also feed into the Northern Queensland Economic Summit in Cairns from 4–6 November 2015, where the entire region will be showcased to international investors. “The White Paper presents us with a great opportunity to develop a shared understanding, at all levels of government, of the importance of this region to the economic future of Australia as a whole.” The Minister said her priority is to ensure North Queensland reaches its full potential as a great place to live, work and do business. “This means getting the settings right to attract people and investment and ensuring the business community knows what North Queensland has to offer,” she said. “A key part of this is leveraging opportunities presented in the Australian Government’s White Paper on Developing Northern Australia. “This is evidence to show that the time is right for action in the region and the Palaszczuk Government is doing all it can to ensure North Queensland receives its fair share of funding. “Our Government recognises the important role local governments play in maintaining assets, and ensuring our communities are great places to live and work.” repayment plans. Mayor Jenny Hill Mayor Deirdre Comerford Mayor Margaret Strelow Policy intent is one thing – implementation is another... 14 ThreeSixty : Growth PUBLIC PROJECT PRIVATE MONEY PPPs have been around for some time and will continue to play a key role in facilitating growth and development of local government infrastructure in Australia. They are a viable method of project delivery for the development of infrastructure in growing areas. Advantages Amongst the key fi ndings from Infrastructure Partnerships Australia, PPPs were more likely to be concluded on budget and on time compared to traditional projects, providing greater commercial surety to both government and the community. PPPs can achieve better value for money because the process of competitive bidding at the ‘Expression of Interest’ stage provides incentives for increased competition (and also because the private sector generally has better ability to deliver the project in comparison to government). Proponents also have greater design freedom and increased incentives to innovate and project risk is generally more evenly and effi ciently distributed. The use of private sector funding is generally more expensive than government funding. However, the “whole of life” costing approach inherent in the risk allocation typical of PPPs can actually reduce and make more certain the overall costs of procurement, operation and maintenance of such infrastructure. The development of new relationships providing benefi ts to all parties is another important advantage. PPPs develop local private sector capabilities through joint ventures with large international fi rms and provide sub-contracting opportunities for local fi rms in areas such as civil works, electrical works, facilities management, security services, cleaning services and maintenance services. New and valuable skills and competencies are transferred to government agencies through these partnerships due to the increased levels of private sector participation, particularly when foreign companies are involved. At the same time, risk is transferred to the private sector over the life of the project. There are economic benefi ts as well, as diversity increases competition, local business receives a boost and industry associated with infrastructure development expands. There is a growing appetite at all levels of government to adopt privately fi nanced Public Private Partnerships (PPPs). As state and local governments struggle with cash fl ow they are increasingly looking to alternative measures and sources of funds, such as the private sector, to deliver infrastructure. ThreeSixty : Growth 15 Challenges PPPs do not come without their challenges and potential problems. Development, bidding and ongoing costs in PPP projects are likely to be greater than for traditional government procurement processes. Finance from the private sector will usually only be available where the operating cash fl ows of the project company (the SPV) are expected to provide a return on investment. Otherwise, the cost has to be borne either by the customers or the government. With the long-term nature of these projects (typically for 25-30 years) and the complexity involved, it is diffi cult to identify all possible contingencies during project development. Events and issues may arise that are not anticipated in the documents or by the parties at the time of the contract. Similarly, volatility in the political environment such as election timelines and government policies may affect the project. This is particularly an issue in Australia at the moment given the constant changes in government and new governments changing their position on proposed government projects (an example of this is the Victorian East West Link project). Increased reliance on the private sector can also lead to diminished accountability on the public sector for the project and also leads to poorer management of the project by the public sector. Also there is the potential for confl icts between the partners. For example, partners may disagree on project issues, which may lead to losses in time, resources, and disputes. This can in turn delay the delivery of the PPP project. A potential hurdle for local councils looking to use PPPs is that in most jurisdictions, local governments are subject to various regulatory constraints if proposing to deliver a PPP project. Local governments in NSW and Qld (and in other States) must comply with PPP guidelines when proposing to deliver and enter into a PPP project. Compliance with the guidelines requires documents to be prepared and processes to be followed and this can increase costs. It needs to be borne in mind that while PPPs might be a convenient way of fi nancing the construction of needed infrastructure, the Queensland Government’s approach to the accounting treatment of the PPP concession means that it’s treated like any other form of funding. That is, the project might not be ‘off balance sheet’ and the funding costs (over the concession period) will need to be accounted for as if the money was being borrowed from Queensland Treasury Corporation. Requirements A challenge for all councils looking to facilitate growth through the use of PPPs is to ensure that they have the appropriate experience and resources available. Given that councils do not generally have much technical expertise in large infrastructure projects, most would rely on the commercial business acumen of the private sector to successfully engage in a PPP process. Steps that a council would need to put in place to develop, evaluate and manage processes in the context of a PPP project include: establish an internal governance structure (this structure facilitates internal decision making and clearly sets out who is responsible for what develop communication protocols / procurement plans appointing a probity auditor, and assembling the right team to run the PPP project (commercial team, legal team, technical team etc). It is crucial that the viability of the proposal and the Council’s capacity to enter into a PPP is fully understood, along with all legislative obligations in running a PPP. Ongoing resourcing can be a big issue as PPP projects are long-term – in turn, councils have to think long-term and need to have the right team in place for a number of years. Does size matter? Large councils in Australia generally have the fi nancial and technical capacity to deliver PPP projects under national PPP policy guidelines. Smaller councils however, could consider “bundling” together a number of assets into a single project, such as local roads and water/sewerage infrastructure and community facilities within a geographic area. Councils, regardless of size, hold assets that are attractive to many groups in the private sector – they often own, or have management of prime land and assets. The private sector can bring the skills and experience needed to make complex projects work, along with a level of innovation. The extension of capital repayments over a long period of time can also encourage innovation and new solutions that may meet the unique needs of rural or remote councils. A signifi cant number of councils, particularly in rural and remote areas, remain dependent on grants from other spheres of government to meet their expenditure. Working with the private sector can address the shortfall through access to external fi nance and the internal resources of the private sector group. 16 ThreeSixty : Growth SMALL COUNCILS CAN! The City of Marion in South Australia procured a new State Aquatic Centre, which included a range of facilities suitable for competition and recreational use, by way of a PPP. The Holroyd City Council in NSW has used a PPP structure for the installation and maintenance of electronic school zone signage. The Parramatta City Council has implemented a PPP for the redevelopment of the Parramatta civic centre (including community facilities, retail, commercial and residential towers, together with a car park), the total project value is estimated at $1.4 billion (2008). Ren Niemann, Partner, McCullough Robertson [email protected] MODELS PPPs can be categorised based on the extent of public and private sector involvement and the degree of risk allocation. Finance only: A private entity, usually a fi nancial services company, funds a project directly or uses various mechanisms such as a long-term lease or bond issue. Operation & Maintenance Contract (O & M): A private operator, under contract, operates a publicly-owned asset for a specifi ed term. Ownership of the asset remains with the public entity. Build-Finance: The private sector constructs an asset and fi nances the capital cost only during the construction period. Design-Build-Finance-Maintain (DBFM): The private sector designs, builds and fi nances an asset, provides hard and/or soft facility management services as well as operations under a long-term agreement. Build-Own-Operate (BOO): The private sector fi nances, builds, owns and operates a facility or service in perpetuity. The public constraints are stated in the original agreement and through ongoing regulatory authority. Concession: A private sector concessionaire undertakes investments and operates the facility for a fi xed period of time after which the ownership reverts back to the public sector. Small or regional councils considering a PPP project should liaise with other councils who have previously run a PPP and look at the various models available to fi nd the one that best suits their need. Build, operate, own and transfer (BOOT) or build, operate and transfer (BOT) arrangements are models often favoured by small or regional councils. Under a BOOT, the service provider is responsible for design and construction, fi nance, operations and maintenance and commercial risks associated with the project. It owns the project throughout the concession period. The asset is then transferred back to the government after a set length of time at little or no cost. BOOT contracts are generally less complicated and easier to administer, making it more attractive for small councils. There are many alternative structures for BOOT type projects, such as Build-Own-Operate (BOO), Design-Build-Operate (DBO) and Lease-Own-Operate (LOO) and they tend to work better for smaller projects. Delivery methods remain complex however, even for BOOTS, so it is a good idea to establish a Legal Advisory Committee to assist with negotiations, risk minimisation, commercial issues, contracts, due diligence, market testing for viability and the development of probity plans. Ren Niemann, Partner, McCullough Robertson [email protected] ThreeSixty : Growth 17 The Bundaberg Regional Council (BRC) has turned to information technology to fi nd the solution to streamlining their procurement processes, adopting a new procurement system which gives suppliers and local businesses the opportunity to register online as providers of goods and services for panel arrangements. The Bundaberg region covers 6,600 square kilometres and the Council manages and maintains more than 350 parks and gardens, three sporting complexes, seven skate bowl facilities, 19 boat ramps, 11 waste management facilities, 104 pump stations, 10 sewage plants and 11 re-chlorination facilities. The Council also manages road maintenance works over the entire road network within the Bundaberg, Childers and Gin Gin regions. Bundaberg Regional Council purchases approximately $50 million in goods and services each year. Of course, many local governments have even greater procurement budgets and manage even more facilities covering larger geographic areas, exacerbating the problem of procuring the myriad services required and managing long lists of existing and potential suppliers. The BRC Strategic Supply team was becoming increasingly frustrated by the manual procurement processes, which they found impeded their ability to provide fl exible ways to engage their supplier panels and collaborate on projects. The solution was to tailor a procurement platform built specifi cally for the needs of the Council. The BRC Strategic Supply Team surveyed the market in early 2015 looking for an off-the-shelf product to manage Council’s Panel arrangements. After seeing a demonstration of ProcureIT- the engineers and fi eld staff loved it. The Team was excited about ProcureIT potential and worked with the software developers at ProcureIT to deliver a great value added solution to Council. ProcureIT, a system with fully customisable capabilities, was introduced and launched in September. Flexible enough to meet the Council’s specifi c needs, the system also saves time on correspondence and is simple to use, encouraging early adoption by the local community and businesses. Deputy Mayor and Council Spokesperson for Governance, Cr David Batt, said the BRC ProcureIT system would allow Council to set up its own panel arrangements to shortlist suppliers of goods and services that are regularly acquired and used by Council. “Suppliers and local businesses will now be able to register for acceptance as a panel provider through BRC ProcureIT,” Cr Batt said. “BRC ProcureIT has been implemented with the aim of streamlining the panel application process and managing ongoing compliance required by Council once the panels are established. “The portal allows Council staff to send quote requests directly through to their required suppliers who are alerted via SMS and email of the request. Suppliers can then reply to the request. “Each supplier panel gives Council staff the ability to rate and review suppliers based on experience and share this information amongst team members.” ProcureIT’s fully tailored capabilities not only provide a solution to panel management but also streamline and seamlessly manage all estimating and procurement processes, centralise all supplier data, enable supplier engagement fl exibility, compliance management, project collaboration between staff members and supplier performance reviews. Owner of Bundaberg business Craft Rentals, Terry Craft welcomed the online portal. “As a long-term supplier to the Bundaberg Regional Council, I’m pleased to learn that this avenue for online engagement has been implemented,” Terry said. “This will simplify the current process and save us a lot of time in correspondence.” Jennifer Marshallsea, Council’s Strategic Supply Manager has seen an immediate impact on streamlining their Panel processes, with over 30 local suppliers actively signing up and engaging BRC through the platform within two days of launching. New software provides solution to procurement problems Procurement of goods and services can be problematic for any organisation, let alone local governments with their wide-ranging functions and requirements. within two days of launching. Cr David Batt, Deputy Mayor and Council Spokesperson for Governance, Bundaberg Regional Council 18 ThreeSixty : Growth DEFYING THE ODDS IPSWICH GROWTH OUTPACES NATION One of the nation’s top fi ve growth regions and Queensland’s fastest growing local government area, Ipswich’s population is tipped to reach 435,000 by 2031. ThreeSixty : Growth 19 Ipswich Mayor Paul Pisasale said sustainable development, investment in infrastructure and renewed commercial interest continued to drive the city’s population towards record growth. “Population fi gures show Ipswich is defying state trends – our city is growing at nearly twice the rate of the rest of Queensland,” Cr Pisasale said. “This has positioned Ipswich as the leading regional centre in the Western Corridor and the major growth area of the state. “We welcomed our 190,000th resident in October 2015 and about 90 people move to Ipswich each and every week.” The revitalisation of the Ipswich CBD along with unprecedented growth and investment in the Springfi eld area, including nearby Brookwater has energised a community that was once built on industry. The city is also leading the way in job self-containment. Of the 51,000 people who work in Ipswich, nearly 34,000 of them also live in the city. Ipswich is home to the largest RAAF base in Australia, Amberley along with the largest drag racing venue outside the USA, Willowbank Raceway. The $72 million state headquarters for GE Australia is now in Springfi eld Central, with the $85 million Mater Private Hospital Springfi eld set to open by the end of the year. The development of the $550 million Dusit Thani Brookwater Golf and Spa Resort will further enhance one of Australia’s best golf courses, and stage two of Orion Springfi eld Central shopping centre was a $155 million investment in the region. The city’s highlight reel is a director’s delight, which shows no signs of being cut. “The CBD itself continues to come of age with restoration of heritage buildings into some really bold, modern venues where people can meet, eat and do business,” Cr Pisasale said. “Ipswich people have confi dence in their city. They see real change, positive change, in their city, their suburbs and their CBD. “They see international businesses coming to Ipswich alongside sustainable developers and leaders in master planned communities.” Many of those developers and planners are laying their foundations in the Ripley Valley, a 100 square kilometre community that will be home to more than 120,000 people when fully developed. Five separate residential estates are already underway, led by Perth heavyweight Amex Corporation and Japan’s Sekisui House. Once completed, the Ripley Valley will include 50,000 homes, 13 primary schools and fi ve high schools. It will be the world’s fi rst totally sustainable community, with half of the development area conserved as green space and recreation areas. “Ipswich is growing, but we’re getting younger. We’ve got 38% of our population aged under 25 and an average age of 32, compared to 37 across Queensland,” Cr Pisasale said. Population fi gures show Ipswich is defying state trends – our city is growing at nearly twice the rate of the rest of Queensland. Cr Pisasale 20 ThreeSixty : Growth “Ripley Valley will be one of the major factors that continue this trend. It’s all about families and young people moving to Ipswich to enjoy affordable housing, modern infrastructure, a sustainable approach to development, and the jobs of tomorrow.” Many of these jobs, Cr Pisasale says, don’t even exist yet. “Building digital highways will set Ipswich on a secure and successful path to capitalise on the digital economy and will position the city as an early adaptor that is ahead of the curve,” he said. “It will also help ensure our residents, community groups and businesses are in the best possible position to deal with and understand the global digital future and economy. “The best outcome for us is to create the strongest environment for our city to keep attracting new businesses and create a modern CBD for the future that is supported by centres in suburban and rural areas.” Elected to Ipswich City Council in 1991 and Mayor since 2004, Cr Pisasale was at the coalface as the community enjoyed intense investment in the mid-2000s. Devastation and heartache followed during the fl ood of 2011, but in true Ipswich spirit the city is once again riding a wave of success. “Ipswich has always been a resilient community. In recent years we’ve been confronted by the Global Financial Crisis and the biggest fl ood since 1974 and we’ve come out on the other side a stronger city,” Cr Pisasale said. “The future for Ipswich is very bright and it’s something we can all be proud of. I’m excited, but more importantly our residents are excited. “That’s the best thing about this – we’ve got a happy, confi dent and vibrant community that will continue to lead growth in the Western Corridor and the rest of the state for many years to come.” Mayor Paul Pisasale, Ipswich City Council ThreeSixty : Growth 21 The Emissions Reduction Fund (ERF) is the centrepiece of the Commonwealth Government’s Direct Action Plan on climate change and is expected to result in over 47 million tonnes of carbon abatement. The ERF operates as a fund in which project proponents enter into ‘curb and abatement contracts’ with the Commonwealth Government’s Clean Energy Regulator (Regulator) to purchase abatement reduction at the lowest cost. The price of the abatement is determined by competitive bidding, otherwise known as a ‘reverse auction’. In effect, the scheme is designed to purchase the lowest cost of abatement. In the fi rst auction, held over two days in April earlier this year, the Regulator awarded 107 contracts collectively valued at over $660 million. The successful contractors are now required to deliver over 47 million tonnes of carbon abatement. The average price per tonne of carbon abatement was approximately $13.95. The price paid is high by international standards (although lower than the fi xed price applied by the previous carbon tax). The attractive pricing means landfi ll operators, local governments, Indigenous communities and businesses in the land and agribusiness sectors continue to have an opportunity to achieve decent returns from participating in the ERF. Isaac West, Partner, McCullough Robertson [email protected] GROWTH means emissions also grow CAN COUNCILS FARM CARBON? 22 ThreeSixty : Growth OPPORTUNITIES FOR COUNCILS Whether a council is in a growth phase or has a steady population, opportunities exist for local government to both reduce emissions and benefi t from carbon abatement through the ERF scheme. Councils across Australia are undertaking energy effi ciency projects, waste diversion and landfi ll capture and land revegetation. Local government can also act as aggregators of emissions and undertake education and outreach programs. Capturing landfi ll and using landfi ll gas for energy generation is a good example of this. They can also work with other councils to jointly operate or manage carbon abatement projects. One of the examples provided by the Department of Environment is a waste facility operated jointly by a number of councils in Western Australia. “Mixed household waste from 250,000 households is sorted and processed in an alternative waste treatment facility that treats waste to convert it rapidly into usable compost. The facility reduces the quantity of waste sent to landfi ll and produces compost that is used to put nutrients back into the soil for improving crops, pastures, parks and gardens. Each year the facility prevents over 32,000 tonnes of carbon dioxide equivalent from entering the atmosphere.” Councils can make signifi cant savings by examining their operations for energy effi ciency and emissions reduction opportunities. They are able to aggregate a series of small projects such as this one described by the Department of Environment: “A Shire Council in regional Victoria combined the installation of energy effi cient LED lighting with a new air conditioning system to reduce the power bill of its Shire offi ce by over 30 per cent. The council is now looking at installing a co-generation power unit at its community aquatic centre. The unit would provide heating for the pools and buildings, while also generating up to 85 per cent of the centre’s power needs.” HOW DOES IT WORK? A council or councils can participate in the ERF in various ways. Projects must be new and meet the eligibility criteria for approved methodologies. Eligible activities councils may consider include: the capture and combustion of: landfi ll gas and agricultural waste, and biogas and wastewater alternative treatment of organic waste, and allowing native forest to re-generate to its native state on council-owned land. Councils will need to identify emissions reductions that go beyond their usual business activities. Particular ‘methods’ are used to estimate the emissions that will be reduced by an identifi ed activity or project. Just like any business, councils have the opportunity to sell these emissions reduction in the auctions run by the Regulator. The Regulator buys the lowest priced emissions reductions in each auction, up to a certain price. A maximum benchmark price per tonne of carbon abatement may be set prior to each auction, though this is not publicly available. As mentioned above, the average price per tonne of carbon abatement delivered at the April 2015 auctions was approximately $13.95. It remains to be seen whether prices at this level can be achieved again by project proponents in circumstances where unsuccessful bidders from the fi rst auction participate again, alongside a number of new projects that have been registered since the fi rst auction. If a council is successful at auction, they will sign a contract with the Regulator to carry out the project under the approved methods. Councils must then complete the project using the approved methods before payment is made. When the Regulator has verifi ed that the project has achieved the reductions, the council will receive carbon credits and payment at the price bid at auction. Councils interested in taking up carbon farming options should seek the proper advice to ensure any schemes or projects meet legislative requirements and the establishment and ongoing costs are understood. For further guidance or assistance in relation to the process, the methods or the auction and Regulator contracting process generally, please contact us. Local government can also act as aggregators of emissions and undertake education and outreach programs. Capturing landfi ll and using landfi ll gas for energy generation is a good example of this. ThreeSixty : Growth 23 February 04 05 Local Government, In House Counsel Forum McCullough Robertson, Brisbane, Qld [email protected] 23 LGMA CEOs Forum McCullough Robertson, Brisbane, Qld www.lgmaqld.org.au CALENDAR OF EVENTS NOVEMBER MARCH November 10 ERS Seminar – Managing Christmas Party Claims, McCullough Robertson, Brisbane, Qld www.mccullough.com.au/events 12 13 LGMA Branch Conference, Noosa, QLD www.lgmaqld.org.au 18 19 LGMA Branch Conference, Ayr www.lgmaqld.org.au 23 24 LGMA Branch Conference, Emerald www.lgmaqld.org.au 2016 25 Government Seminar Series, landowner rights, McCullough Robertson, Brisbane, Qld www.mccullough.com.au/events 26 LGMA CEOs Forum, McCullough Robertson, Brisbane, Qld www.lgmaqld.org.au 27 IPWEA CQ Branch Conference Rockhampton, Qld www.ipwea.org 24 ThreeSixty : Growth ThreeSixty : Growth y If you would like to contribute or have an idea for an article for our next edition please contact Kate Chaundy, Business Development and Marketing at McCullough Robertson – [email protected] (07) 3233 8832. Our contributors Troy Webb, Partner, McCullough Robertson Jackie Trad, Deputy Premier and Minister for Infrastructure, Local Government and Planning Finn Jones, Group Design Director at Place Design Group, David Grant, Strategy Director at Place Pam Parker, Logan City Council Mayor Bill Ludwig, Livingstone Shire Council Mayor Peter Stokes, Partner, McCullough Robertson Jenny Hill, Townsville City Council Mayor Deidre Comerford, Mackay Regional Council Mayor Coralee O’Rourke, Minister Assisting the Premier on North Queensland David Batt, Deputy Mayor, Bundaberg Regional Council Terry Craft, owner Craft Rentals Jennifer Marshallsea, Council’s Strategic Supply Manager Ren Niemann, Partner, McCullough Robertson Paul Pisasale, Ipswich City Council Mayor Isaac West, Partner, McCullough Robertson Experience and expertise across the full carbon project lifecycle Natural Carbon develops carbon farming projects in Australia. It brings together global experience and expertise across the full carbon project cycle – from concept to sales, providing a one stop shop for entities seeking to generate alternative revenue streams in a climate friendly way. The company works with governments, big business, farmers, indigenous groups, and other land managers to achieve long-term economic and environmental benefi ts to their communities. Services Concept Feasibility Study Register/ Approval Operation Monitor & Audit Sales Carbon Solutions for Landowners For further information contact: Isaac West Partner McCullough Robertson E [email protected] P 07 3233 8576 Natural Carbon Pty Ltd is a joint venture of: BRISBANE Level 11, 66 Eagle Street Brisbane QLD 4000 GPO Box 1855, Brisbane QLD 4001 Phone +61 7 3233 8888 Fax +61 7 3229 9949 SYDNEY Level 32 MLC Centre, 19 Martin Place Sydney NSW 2000 GPO Box 462, Sydney NSW 2001 Phone +61 2 8241 5600 Fax +61 2 8241 5699 NEWCASTLE Level 4, 251 Wharf Road Newcastle NSW 2300 PO Box 394, Newcastle NSW 2300 Phone +61 2 4914 8900 Fax +61 2 4924 8999 [email protected] www.mccullough.com.au @MCRlaw facebook.com/MCRlaw