SGS Economics and Planning acknowledges that the Aboriginal and Torres Strait Islander peoples of Australia are one of the oldest continuing living cultures on Earth, have one of the oldest continuing land tenure systems in the World, and have one of the oldest continuing land use planning and management systems in the World. [...] at risk through the lens of conventional financial performance indicators, the degree of vertical fiscal imbalance, uneven service access across Australia, and the • Long-term growth in local governments’ own-source revenue has stagnated relative influence of the Commonwealth on spending decisions at the state and local to state and Commonwealth revenue growth. [...] Without the SV, however, the council had contemplated ‘reducing the number of hours libraries are open, reduction of total employee numbers by 120 (over three years), the closure of childcare centres, reduction of the frequency and extent of maintenance of open spaces, parks, sporting fields, and reduced maintenance of council assets leading to their deterioration’. [...] Service types are based on the Classification of the Functions of Government (COFOG-A), an Australian application of an international classification that supports the reporting of government expenses according to the purpose for which the funds are used. [...] The committees of the State Parliament should hear the views of the associations of municipalities when discussing draft laws.’ In addition to the various levels of German government, the courts also play a significant role.
- Pages
- 48
- Published in
- Australia
Table of Contents
- SGS Economics and Planning acknowledges the First Nations Peoples of Australia and on whose Country we live and work. 2
- We pay our respects to the First Nations Peoples past and present and acknowledge their stewardship of Country over thousands of years. 2
- Executive Summary 4
- A 7 billion boost to national Gross Domestic Product from improving financial sustainability in local government 5
- Financial sustainability 6
- Indicators of financial sustainability 7
- Without financial assistance grants and other contributions a significant proportion of councils would not meet conventional tests of financial sustainability Operating surplus ratio 8
- Asset sustainability ratio 9
- Debt service ratio 10
- Over a quarter of all Australian councils experienced low financial sustainability in 2021-22 11
- Many councils have consistently fallen short of financial sustainability targets over the past five years 12
- A significant proportion of councils cannot properly maintain assets due to revenue constraints 13
- Asset maintenance shortfalls risk becoming worse as cumulative renewal gaps grow each year 14
- Local governments growth in per capita expenditure lags that of other tiers of government 15
- Financial pressures place core and valued services at risk 16
- Financial pressures place core and valued services at risk 17
- Financial pressures place core and valued services at risk 18
- Financial pressures place core and valued services at risk 19
- Local government spending on education environmental protection and public order and safety has grown the fastest over the past decade 20
- Declines in local government spending indicate service re-prioritisation 21
- Impacts of more sustainable local government finances 22
- Local government financial sustainability and Australias macro-economic performance 23
- A 7 billion GDP boost from improving financial sustainability in local government 24
- Vertical fiscal imbalance 25
- A growing proportion of councils are dependent on transfers from other tiers of government 26
- Growth in local governments own source revenue has lagged revenue growth in other levels of government 27
- There is growing evidence that state governments are shifting services to councils without commensurate resourcing 28
- Horizontal fiscal equalisation 29
- Improving local government financial sustainability would help to address uneven access to services across Australia 30
- A financially stable local government is better equipped to provide important community services 31
- The proportion of national taxes allocated to local government has shrunk over time 32
- The proportion of national taxes allocated to local government has shrunk over time contd 33
- Financial barriers to local decision-making 34
- State and Commonwealth programs involving tied funding to councils are not always tailored to council needs 35
- The amount of Commonwealth tied grant funding to state and local governments is growing 36
- Tied grant funding is difficult to access due to competitive state and Commonwealth programs 37
- International comparisons of local government funding 38
- In England financial challenges have led some councils to declare bankruptcy 39
- Lessons from Germany on local needs-based assessment 40
- Lessons from Germany on local needs-based assessment contd 41
- Appendix A 42
- A 7 billion GDP boost from improving financial sustainability in local government 43
- Scenario 1 Improved ability to finance roads maintenance 44
- Scenario 2 Improved ability to finance open space 45
- Scenario 3 Improved ability to perform regulatory services 46
- Scenario 4 Increase block transfers of Commonwealth and State funding to local government 47
- Scenario 5 Improved rates of workforce attraction and retention 48
