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Economy and the political pendulum

Monday 25th June, 2018

Over four decades ago I started studying economics at university, in particular - something called ‘economies of scope and scale'.

 

Despite my best attempts to leave those learnings behind me, the fundamentals have never faded. There is real economic power in the massing of many, whatever the subject matter.

Councils are no different; the combined efforts of councils grant us the massing of many; power through cooperation and unity.

It’s fair to say that I realised decades ago that success in advocacy was cyclical. Despite our very best efforts, it depends on the economy and the political pendulum. If we get those two things aligned as we currently have at both state and federal level, we can watch the millions of external funding roll in. Other times its just bloody hard.

The term - getting blood out of a stone comes to mind. That’s why focussing on what we can control, like costs, is so important. Hence the LGAQ’s long term focus on creating sector wide businesses, services and tools.

A big part of my 26-year journey as your CEO at the LGAQ has been to realise the power of many, be it in advocacy or service provision and now big data and data analytics. It works. Together we can achieve more than we can individually. It’s that simple. Councils manage $102 billion of community assets, employ 40 000 people and spend $12.5 billion a year, and as big as Brisbane City are, they are not quite a quarter of that total.

Collectively, councils are a powerhouse.

It’s hard to imagine that it’s 23 years since your Association created Local Government Mutual to realise bulk insurance savings. Many other similar initiatives followed; Local Buy, LGW, DDS, LG Online (the pre-runner to Resolute) and Total Solutions.  It was a golden three-year run for the LGAQ under the late, former LGAQ President Tom Pyne, who created in quick time the types of entities that gave councils real practical value.

Then, under the leadership of our current President, Mayor Mark Jamieson, all, bar the Insurance and workers compensation, were incorporated into a single entity; Peak Services.

Now for the staggering savings; the power of economies of scale laid bare. Independent assessment has shown LGM and LGW have saved members over $500 million in reduced premiums over their lifetime.

Just on four years ago KPMG estimated that all LGAQ businesses cumulatively saved our members $140 million a year. Since then we have added LG Sherlock which we hope will achieve at least that in annual savings again.

At Local Government House we can put our hand on our heart and honestly say through our initiatives we have saved our members close to $2 billion over 20 years. That’s extraordinary and the only beneficiaries have been you, our members and long may it go on.

By Greg Hallam AM, LGAQ CEO

Local Government Association of Queensland
LG House, 25 Evelyn Street, Newstead Qld 4006


 

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