DFES fire levy management under review

09 Feb, 2017 02:00 AM
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Transparency and accountability in funding arrangements are vital for public confidence.

TRANSPARENCY concerns about the Department of Fire and Emergency Services (DFES) controlling and allocating Emergency Services Levy (ESL) funds are being revisited.

The subject of recommendation to State government by Bill Keelty and Euan Ferguson in their 2011 Perth Hills and 2016 Waroona fire reports, also noted in a 2014 Parkerville bushfire review, DFES's control of ESL funds is under review by the Economic Regulation Authority (ERA).

Last week the ERA began seeking public comment on who should control the ESL which is projected to raise $339 million this year.

It released an issues paper for emergency service stakeholders, and anyone interested, as a first step of a review of the ESL requested by Treasurer Mike Nahan.

Mr Nahan's request was in response to Mr Ferguson's call for an independent assessment of ESL management and distribution.

The issues paper asked: "Which agency should be tasked with distributing funding from the ESL?"

It also asked "what information should be made public about the administration and distribution of the ESL" and "what processes should be in place to ensure accountability in the expenditure of ESL funding?".

Other questions included "what emergency services expenditures should be funded by the ESL" and "how should funding be allocated across prevention, preparedness, response and recovery activities?".

In 2015-16 the ESL raised $323.3m and comprised 94 per cent of DFES's total revenue, according to the ERA.

Of that amount, 17.7pc – $57.2m – came from regional areas and was collected by local councils as a charge against property and was paid to DFES.

The ERA said DFES used the ESL to directly fund its career Fire and Rescue Service, Volunteer Fire and Rescue Service, Volunteer Fire and Emergency Service units and other "activities and overheads".

DFES also allocated ESL funds as grants to local councils to run bush fire brigades, and to the State Emergency Service (SES) and Volunteer Marine Rescue Service among other emergency service providers.

Out of its $323.3m ESL funds pool in 2015-16, DFES provided $35.6m in grants, with local councils receiving $25.6m of that for bush fire brigades plus a further $2.2m to fund community emergency services managers, the ERA said.

It pointed out DFES did not provide a breakdown of "how all ESL funds have been allocated to specific services, or to specific regions", nor did it "undertake activity-based costing" to allow it to accurately report the amount spent on various types of "non-fire related, non-frontline activities".

There was sufficient detail in DFES's 2015-16 annual report, the ERA said, to determine a proportion of total expenses allocated to prevention measures, which amounted to $48.8m, compared to $316.4m spent on emergency services.

Perceptions of a conflict of interest with DFES determining who will share in ESL funds and what each share will be, while being the major beneficiary, have been raised previously by the Association of Volunteer Bush Fire Brigades and the Bush Fire Front.

The Bush Fire Front is a lobby group formed of mainly retired career foresters, scientists and firefighters concerned insufficient funds are dedicated to bushfire prevention and mitigation which they argue is more cost-effective than concentrating on fire response.

Both groups made submissions to Mr Ferguson's inquiry.

They were concerned about a lack of transparency and "fairness" in how ESL funds were allocated, used and accounted for and a perception some were used to cover DFES administration costs rather than to fund risk-assessed service provision – a point Mr Ferguson took up in his report.

He noted in 2015-16 a 10.8pc increase in levy rate had generated an extra $31.3m for DFES, but coincided with a $15.6m reduction in government funds from consolidated revenue.

Similar concerns about the way the ESL was controlled and used were raised at the Perth Hills inquiry and Parkerville review.

On the strength of submissions about ESL management and allocation, Mr Keelty recommended the State government take it off DFES and transfer it to the Department of Finance.

Three years later the State Emergency Management Committee noted in its Parkerville review Mr Keelty's recommendation had not been implemented.

DFES advised Mr Ferguson it had considered Mr Keelty's recommendation, in conjunction with the finance department, and determined there was no major benefit to be had in transferring responsibility for the ESL.

Mr Ferguson said he considered implementation of Mr Keelty's recommendation "incomplete" because only DFES and the finance department had considered it.

"The administration of the ESL is of such broad-ranging consequence that a larger number of stakeholders should have been involved in its review, including WALGA (WA Local Government Association), volunteer representatives, P&W (Department of Parks and Wildlife) and the Department of Lands," Mr Ferguson said in his report.

"Even if a broader review had reached the same conclusion, that the current administration is appropriate, this would have allowed all parties to have a greater understanding of each other's position."

His 17th recommendation from the Waroona fire inquiry was that the Department of Premier and Cabinet should conduct an independent review of management and distribution of the ESL.

The review should seek input from a range of stakeholders, should assess flexibility and establish "a budget process that enables a shift in investment towards prevention, mitigation and building community resilience and capability", Mr Ferguson recommended.

Chairwoman Nicky Cusworth said the ERA was asked to review the ESL and recommend options to improve management and how it is spent.

"Transparency and accountability in funding arrangements are vital for public confidence," Ms Cusworth said.

"We would like input on who should decide how ESL revenue is allocated to different services.

"We're also interested in what information should be made public about ESL funding, and what checks and balances should be in place to ensure ESL revenue is spent appropriately.

"The State government supports the establishment of a rural fire service, and we're seeking views on whether ESL revenue should be available to fund the cost of a rural fire service and what effect this might have on ESL rates," she said.

Submissions can be lodged by March 10.

The issues paper and details of the review are on the ERA website, www.erawa.com.au.

A draft report will be released later in the year for further public comment and a final report, including recommendations, prepared by September 29.

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Mal Gill

Mal Gill

is wool and dairy writer for Farm Weekly
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READER COMMENTS

Honeyman
13/02/2017 2:24:02 PM, on Farm Weekly

The collection of a FSL should be designed to provide plant & equipment for fire fighting & emergency services, no to "top up" an organisation top heavy with management who treat with arrogance the local volunteer man on the ground. It would be just too easy to slip raised funds into a programme/project that is neither cost efficient or giving staff members something to do.

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