NATIONAL COMPETITION POLICY AND ITS IMPLICATIONS FOR LOCAL-GOVERNMENT

Two aspects of National Competition Policy (NCP) are likely to be the catalyst of change in Australian local government (LG): competitive ne utrality and the reform of public monopolies. Competitive neutrality w ill be achieved in LG through the imposition of tax equivalents, remov al of debt guarantees and cross-subsidisation deemed not to be in the public interest. The reform of public monopolies will open more functi ons to competition. But other items of the NCP are also of significanc e to LC. The imposition of prices oversight of LG services will make t hese more cost reflective. Legislative reviews at LG level will produc e deregulation in some cases and greater uniformity in others while th e issue of allowing private access to LG assets has competitive potent ial in relation to the services and provision of roads, parks and sewe rage treatment. We emphasise the importance of recognising the present benefits of current LG operations and cite the current proposal to pr ivatise Tasmania's water and sewerage services as an example. NCP has the potential to produce further LG boundary amalgamations, or to acce lerate regional cooperation as an alternative. The role of cross-borde r and competitive tendering in this respect are highlighted. Finally, we analyse the implications of the NCP for the Local Government Grants Commission process.