Initial reflections

About this inquiry

1.1On 21 March 2024, the Committee adopted an inquiry into local government sustainability following a referral from the Minister for Infrastructure, Transport, Regional Development and Local Government, the Hon Catherine King MP.

1.2The terms of reference for the inquiry are listed on page v of this report.

1.3The Committee received 287 submissions. These are listed at Appendix A.

1.4The Committee held 16 public hearings in person and via videoconference, in Canberra, Launceston, Wallan, Adelaide, Cairns, Beaudesert and Perth. These are listed at AppendixB.

1.5The Committee is undertaking a thorough examination of all the evidence it received and will subsequently produce a final report. The Committee has however decided to use an interim report to provide an update on work undertaken to date and provide a brief overview on emerging themes from the inquiry.

1.6Local governments (often called councils, municipalities or shires) play a crucial role, acting as the closest tier of governance to the community and addressing various needs and concerns at the grassroots level. Their roles and responsibilities are diverse and multifaceted, encompassing a wide range of services and functions that are essential for the well-being and development of communities.

1.7Capital city, urban, regional, rural and remote Local Government Areas (LGAs) each face vastly different and unique challenges. The diversity between local governments in each state and the Northern Territory (NT) is substantial and there are significant differences in:

• size and population
• road length and infrastructure
• fiscal position, resources and skills base
• physical, social and cultural environments
• attitudes and aspirations of their communities, and
• legislative frameworks.
  8. The Centre for Population highlighted the differences in the over 560LGAs[1] (537councils)[2] across Australia, noting that their growth rates change year on year:

LGAs range from being over 300,000 km2 (e.g. East Pilbara in Western Australia) to close to one square km (e.g. Peppermint Grove in Western Australia). Similarly, population varies greatly between LGAs. The largest LGAs, like Brisbane (Queensland), have populations over 1 million, while the smallest, like Maralinga Tjarutja (South Australia) have populations under 100.[3]

1.9The Centre also noted that LGAs differ in the speed at which they grow and how they grow:

There are three components that make up the population growth of an LGA:

• Net overseas migration: The balance between people moving into and out from the LGA from overseas.
• Net internal migration: The balance between people moving into and out from the LGA from elsewhere in Australia.
• Natural increase: The difference between the number of births and number of deaths in the LGA.[4]

Local government and the Commonwealth Constitution

1.10The Commonwealth Constitution establishes Australia’s federal system. It is a dualist federal system, in which powers and functions are allocated to two levels of government—at the Commonwealth level (first tier) and at the state and territory level (second tier). Local governments or councils are not mentioned in the Australian Constitution; however, each state and the NT has a local government Act that ‘provides the rules for the creation and operation of councils’.[5] In general, these acts ‘cover how councils are elected and their power to make and enforce local laws, known as by-laws’.[6]

1.11The state and NT governments delegate authority to councils to make laws on specific matters, however, council by-laws may be overruled by state and territory legislation as councils derive their powers from their individual state and NT parliaments.[7] Local governments are primarily accountable to the second tier of government and local constituents to discharge their responsibilities under state and territory legislative frameworks.[8]

1.12A local government’s ability to raise revenue is also derived from state and territory legislation. Local governments may raise revenue through rates, duties and charges, user fees, fines and other penalties, developer contributions and charges, the accumulation of interest on financial accounts, and through grants from the Commonwealth, state and NT governments.[9] Local governments’ sole source of taxation revenue is from property taxes.[10]

Local Government Financial Assistance Grants

1.13The Australian Government has been providing Financial Assistance Grants to local governments since 1974–75. Until the territories achieved self-government, these grants did not cover the Australian Capital Territory (ACT) or the NT. Grants for local government bodies in the NT began in 1979–80. And while the ACT does not have a local government system, a grant for municipal purposes was established in 1988–89. Additionally, local roads grants were added to the Financial Assistance Grant program in 1991–92.[11]

1.14To date, the Australian Government has provided over $70 billion under the Financial Assistance Grant program, under the Local Government (Financial Assistance) Act 1995 (Cth) (the Act), to local governments.[12]

1.15Financial Assistance Grants are paid as tied grants through the state and NT governments, and have two components:

• a general purpose component which is distributed between the states and territories according to population (i.e. on a per capita basis), and
• an identified local road component which is distributed between the states and territories according to fixed historical shares.[13]
  16. The Department of Infrastructure, Transport, Regional Development, Communications and the Arts website (the Department) states that:

Both components of the grant are untied in the hands of local government, allowing councils to spend the grants according to local priorities.

Local government grants commissions in each state and the Northern Territory recommend the distribution of the funding under the Financial Assistance Grant program to local governing bodies in accordance with the Act and the National Principles for allocating grants.[14]

1.17The National Principles relating to the allocation of general purpose grants payable under section 9 of the Act among local governing bodies are:

• Horizontal equalisation—general purpose grants will be allocated to local governing bodies, as far as practicable, on a full horizontal equalisation basis
• Effort neutrality—a policy neutral approach will be used in assessing the expenditure requirements and revenue-raising capacity of each local governing body
• Minimum grant—a minimum general purpose grant allocation for a local governing body in a year will be not less than the amount to which the local governing body would be entitled if 30 per cent of the total amount of general purpose grants to which the state or NT is entitled
• Other grant support—relevant grant support provided to local governing bodies to meet any of the expenditure needs assessed should be taken into account using an inclusion approach
• Aboriginal peoples and Torres Strait Islander peoples—financial assistance shall be allocated to councils in a way, which recognises the needs of Aboriginal peoples and Torres Strait Islander peoples
• Council amalgamation—the general purpose grant provided to the new body for each of the four years following amalgamation should be the total of the amounts that would have been provided to the former bodies.[15]
  18. Additionally, some of the current grants transferred from Commonwealth to state, NT and local governments are Specific Purpose Payments (SPPs):

Unlike the GST-related grants, these payments are 'tied' to specific policy areas as agreed between the two levels of government. Similar arrangements exist between state and local government. SPPs for current purposes are included with other current grants in deriving adjusted taxation revenue.[16]

Emerging themes

1.19Over time, the role of local governments has expanded exponentially beyond the three Rs—rates, roads and rubbish. They have increasingly been relied upon to deliver services and infrastructure which were traditionally under the purview of the Commonwealth, state and territory governments. Stakeholders indicated that many new roles and responsibilities are a consequence of the practice of cost shifting.

1.20Throughout the inquiry to date, the Committee received substantial evidence through submissions and at public hearings on how local government financial sustainability and funding frameworks were being impacted by evolving infrastructure requirements, service delivery obligations and cost shifting.

1.21The Committee heard that some LGAs have increasingly taken on responsibility for the management of health, aged care and childcare, and mental health related services. LGAs have also been playing an increasing regulatory role in the areas of development and infrastructure/asset management and planning, housing, environmental biodiversity/conservation requirements, and climate adaptation management.

1.22The Committee also heard about challenges associated with the application of the Financial Assistance Grants.

1.23A brief overview of the evidence received to date on these themes is provided below.

Financial Assistance Grants

1.24Submitters were of the view that the current distribution model was not working. The Grattan Institute stated that the current allocation process had three significant impacts:

First, the general component of the Financial Assistance Grants favours densely populated states, so similar councils in different states get vastly different funding outcomes. Second, the minimum grant to all councils diverts too large a share of funding away from councils that are least able to raise their own revenue. Third, the outdated distribution of the local roads component creates large variations in outcomes for similar councils in different parts of the country, and provides too large a share of the funding to self-sufficient councils.[17]

1.25Professor Sansom believed that the current model appeared to be favouring metropolitan regions over rural and remote councils noting that:

…in 2023–24 ten NSW councils received only the minimum $24.85 per capita grant, indicating effectively no need for assistance, and a further eleven received less than 10 [per cent] more than the minimum (less than $27), suggesting at best very little need. All those councils are located in the Sydney metropolitan region, and the great majority comprised mostly well-established affluent suburbs where the community might be expected to have considerable capacity to pay an extra $27per capita in council rates. Moreover, for no apparent reason two other notoriously affluent suburban councils received well above the minimum grant.

In total, those 23 councils absorbed around $76 million in general-purpose grants. Such an amount could make a very big difference to sustainability and service delivery amongst rural-remote councils, whilst also providing assistance for fast-growing areas experiencing financial stress.[18]

1.26The Canberra Region Joint Organisation, Byron Shire Council, South Gippsland Shire Council, Shire of Shark Bay, Upper Hunter Shore Council, and Muswellbrook Shire Council questioned the fairness of the state formula for allocation of Federal Financial Assistance Grants between regional and metropolitan councils.[19]

1.27Murrindindi Shire Council recommended that the Australian Government review and amend the allocation criteria used for Commonwealth Financial Assistance Grants to recognise small rural LGAs’ financial constraints. The Council submitted that small rural councils have ‘limited incoming generating options [and a] higher cost base due to lower population density’. Rates and charges are the Council’s main source of income, but this represents only 56 per cent of its revenue. Murrindindi is unable to rase rates to more than the Victorian Government’s rate cap mechanism, which it advised is set well below inflation and operating cost increases. To underscore this, the Council advised that analysis undertaken by Municipal Association of Victoria and FinPro in 2022, estimated:

…that cumulatively over the first 4 years of rate capping (introduced in 2016/17) the gap between the increase in the local government cost base and the rate cap increase was 4% for the sector and 9% for small rural councils, indicating a compounding erosion of the rate base.[20]

1.28Submitters suggested that the horizontal equalisation principle was also ineffective. The Grattan Institute stated that the ‘horizontal equalisation principle—that all councils should have the capacity to provide similar services to their communities—is in tension with the principle that dictates minimum grants’.[21]

1.29Murrindindi Shire Council too highlighted horizontal equalisation as a core principle the of Financial Assistance Grants allocation process. Specifically stating that ‘the funding allocation should contribute to each council’s ability to function, by reasonable effort, at a standard not lower than the average standard of other councils in the State/Territory’.[22] However, despite operating cost effectively, community satisfaction indicators across the Shire show that it is unable to achieve comparable outcomes to the average performance of all other Victorian councils.[23]

1.30The Shire of Wyndham East Kimberley stated that ‘in practice [horizontal equalisation] is not evident in Western Australia as there are extremely large differences in the average standards between the metropolitan local governments and the regional and remote local governments’.[24]

1.31The West Australian Local Government Grants Commission noted that it was ‘unable to distribute on a full horizontal equalization basis due to the size of the General Purpose Grant (GPG) pool being approximately 37 per cent smaller than the Commission’s assessment of the relative need for local governments in WA’.[25]

1.32Mansfield Shire Council recommended that the horizontal equalisation approach be reviewed. The Shire suggested such a review take into account the Victorian Government’s ‘Fair Go Rates’ system to ensure funding is allocated more fairly across ‘small shire cohorts who don’t have the same scale of rate payer base’.[26]

1.33The allocation of competitive funding was also considered an ongoing issue by several submitters. The Western Queensland Alliance of Councils stated that there was too much focus on competitive funding programs:

Both the Australian and State Governments place too heavy a focus on, and allocate too much money to, competitive funding programs that generally target new infrastructure projects (‘wants’) rather than the renewal, upgrade and maintenance of existing, essential infrastructure projects (‘needs’) at the expense of smaller Councils in rural and remote areas.[27]

1.34Several councils and shires called for untied non-competitive funding including the City of Moreton Bay, Shire of Chapman Valley, Shire of Morawa, Yarra Ranges Council, Mid Murray Council, the City of Ballarat, and the City of Greater Gelong, to highlight a few.[28]

1.35A significant number of submitters called for a review of the Financial Assistance Grants program, and in particular the distribution formula, quantum of the funding pool, indexation methodology, and the national principles.[29]

1.36The Kimberley Regional Group, the Australian Logistics Council, and the Central Desert Regional Council called for a targeted ‘review into the distribution formula of the Financial Assistance Grants road component to ensure smaller and remote councils have the capacity to maintain the roads under their responsibility’.[30]

Co-contributions

1.37The Department of Infrastructure, Transport, Regional Development, Communications and the Arts submission listed a number of supplementary funding programs and initiatives; some of which require eligible applicants to make co-contributions including the Bridges Renewal Program, Heavy Vehicle Rest Area Initiative, Heavy Vehicle Safety and Productivity Program, Mobile Black Spot Program, Mobile Network Hardening Program, Regional Connectivity Program.[31]

1.38Councils commented that the requirement was problematic and that many were not necessarily capable of co-contributing to grant schemes. The Local Government Association of Queensland stated that:

…when grant funding is competitive (requiring significant investment of time and resources to apply for the grant), or requires funding to be matched by a council (for example, through a co-contribution), it creates challenges for councils, in particular those with a higher reliance on grants.[32]

1.39The Country Mayors Association of NSW noted that ‘smaller regional councils are missing out on funding opportunities because they do not have available cash surplus to fund a co-contribution’.[33] The Local Government Association of the Northern Territory believed that the co-contribution requirement was acting as an inhibitor for councils to even apply for funding.[34]

1.40A consistent theme was that the co-contribution requirements, and alignment with grantor priorities often pose barriers to accessing funding and restricting financially challenged councils from sourcing competitive grant funding for major (and essential) infrastructure upgrades or critical maintenance.

Healthcare providers

1.41LGAs from around Australia commented on how they were increasingly required to provide healthcare services for their communities for a multitude of reasons. Some of the evidence received noted that as health services are reduced or removed from communities across Australia, local governments feel they must step in because there is no-one else.[35] Further noted by submitters was that community expectations have increased, along with government expectations, around each councils’ role in supporting preventative healthcare, ageing-in-place, dementia and youth services.[36]

1.42Councils are also providing infrastructure, such as buildings, to house general practitioner services in rural and regional areas.[37] For example, councils in regional South Australia (SA) are taking on and running medical centres due to gaps in that market.[38]

1.43Other LGAs in WA and the NT commented that they were also experiencing challenges delivering appropriate healthcare to their communities. Sixty-six per cent of WA LGA members advised that they provide financial or in-kind support towards the provision of healthcare services.[39]

Aged care providers

1.44LGAs have expressed an increased expectation from their communities to provide aged care services. The Department of Health and Aged Care noted that ‘there are 152councils that are involved in providing aged-care services either residential aged care through a facility or through the Commonwealth Home Support Program’.[40]

1.45LGAs’ submissions also noted that the increased prevalence of providing aged care services is impacting their financial sustainability. Several factors have been identified for this, including that councils are having to facilitate the provision of aged care due to the absence of state and NT government services,[41] or market failures.[42]

1.46Communities also identified that independent living and aged care services are not being provided by the market or another provider in their local areas.[43] One council stated that they were reluctant to get out of providing aged care services because there are not many providers wanting to cover markets where there is a high level of demand across large distances.[44] Local Government NSW advised that approximately seven to eight councils, mainly in the states rural and regional areas, provide aged care services due to market gaps.[45]

Childcare providers

1.47Many LGA’s that provided a submission to this inquiry noted that they had also commenced providing childcare services due to the lack of viability in the childcare market for private providers. The Australian Local Government Association highlighted that collectively local governments ‘are one of the largest providers of childcare in Australia’.[46]

1.48Regional Development Australia Tasmania stated that many small, rural councils subsidise or offer these services as they are considered commercially unviable by the private sector.[47]

1.49The Corangamite Shire Council commented that some councils were considering long-term involvement in the childcare sector as a provider, adding:

Demand for childcare services is high along with infrastructure costs, workforce is scarce and market failure exists in many communities. Historically, councils have met the cost of market failure, especially in rural communities. For these services to be viable, government funding is required.[48]

1.50Submitters also noted that a lack of appropriate and affordable childcare was acting as an inhibitor to councils attracting a workforce.[49] The Lockhart Shire Council noted that the closure of private owned childcare had significant ‘flow on effects with some parents potentially having to reduce their working hours or, worse still, having to cease working all together at a time when local businesses are having difficulty is attracting staff’.[50]

1.51Local Government NSW noted that ‘a lot of the council funded childcare centres now were set up under prior federal government schemes where grants were available, and the buildings or property were contributed’ adding that when Government subsidies were removed, councils came to the conclusion ‘that they had to be subsidised by their rate base because their communities needed the care’.[51]

Mental health services

1.52Submitters to the inquiry raised concerns about a lack of funding support to deliver appropriate mental health services in rural, regional and remote Australia. Underscoring that access to mental health services is a significant challenge for many councils and their communities.

1.53Local governments are expected by communities and other levels of government to support mental healthcare, social inclusion, and support for vulnerable populations.[52] Lesser access to mental health services can leave people in regional, rural and remote areas particularly vulnerable to mental health problems and suicide.[53] As such, essential mental healthcare programs are being provided, funded or subsidised by councils.[54] But local governments are not adequately equipped to respond to and deal with greater levels of mental health issues, domestic violence and substance misuse.[55]

1.54Additional challenges include:

• a lag time between population growth and sufficient delivery of mental health services, which is evident in all states and the NT, requiring improvement planning for communities being established in growth areas[56]
• infrastructure gaps and limited private commercial space for mental health services has necessitated councils to investigate and fund additional facilities to house providers.[57]

Infrastructure and asset management

1.55The Local Government Association of SA submitted that around 10 per cent of the infrastructure owned and managed by councils is in poor condition and requires intervention.[58] In particular, ageing infrastructure was highlighted as a significant contributing factor influencing the financial sustainability of councils.

1.56Many councils commented on the challenges in meeting the maintenance and rural requirements of their ageing infrastructure.[59] Kiama Municipal Council referenced an Australian Local Government Association report which concluded that $30 billion was required to renew and replace ageing infrastructure in 2018 which was only expected to increase overtime:

The amount of infrastructure requiring renewal will continue to increase over the next 20 years as structures built during the post-war “Baby boom” and the rapid growth period of the 1960s and ’70s age and their condition, capacity and function declines. This infrastructure cliff is fast approaching and requires strategic management and coordination, rather than distribution among political grants / donations.[60]

1.57Indigo Shire Council stated that ageing infrastructure was increasing financial strain on councils, principally in regional areas.[61]

1.58Knox City Council commented on the wider impacts of maintaining ageing infrastructure:

Many councils are facing the challenge of maintaining and upgrading aging infrastructure. This includes roads, bridges, public buildings that require significant investment to ensure safety, inclusion and functionality. Where councils are unable to renew infrastructure in a timely manner this results in increased maintenance costs and may result in a reduction of overall facilities to communities if councils are unable to renew due to funding constraints may result in the loss of facilities within communities.[62]

1.59Infrastructure Australia’s 2019 Infrastructure Audit identified a number of challenges across varied sectors due to ageing infrastructure including:

• much of Australia’s school infrastructure is ageing and not fit for purpose for 21stcentury learning
• competing priorities are reducing the focus on maintaining ageing assets in tertiary education infrastructure
• ageing justice infrastructure assets are not fit-for-purpose for changing user demographics and needs
• many major coal generation assets are ageing and approaching retirement
• urban water sector faces considerable risks, including the impacts of climate change, population growth, ageing assets
• many regional and remote utilities face mounting costs to maintain, renew or upgrade ageing water and wastewater assets, but have limited funding through grants or revenue.[63]
  60. State and NT LGAs highlighted several challenges they were experiencing including revenue, construction and maintenance costs, ageing infrastructure, project backlog, and management obligations.
  61. Local Government NSW put forward the view that ‘the financial sustainability of councils has been undermined by a relative decline in financial assistance from federal and state governments, councils’ rate pegging and other factors for over 40years, [resulting in the] under provision of community infrastructure and services and the deferral of infrastructure maintenance and renewal expenditure’.[64]
  62. With population growth, ageing infrastructure and project backlogs for new infrastructure to support that growth is becoming increasingly challenging.[65] Infrastructure is outdated and many building assets are at or near end of life; there is not enough budget to conduct the required annual maintenance or build fit for purpose replacements and divest liabilities.[66]
  63. These needs are not being met due to an inability for councils to generate sufficient funds themselves.[67] Additionally, subsiding or providing other community services is diverting resources away from the construction and maintenance of public infrastructure.[68]
  64. Councils have significant asset management obligations, with aged infrastructure and increasing maintenance and renewal costs, and depreciation impacts.[69] It costs over $35billion to manage assets and infrastructure within some LGA boundaries; while the cost of replacing assets in poor condition exceeds the total annual revenue available to those local governments.[70]
  65. This shortfall provides a strong incentive for councils to delay the maintenance of long-term infrastructure assets like roads and bridges, since the costs of delaying maintenance are not felt for some time.[71] In 2006 there was a national local government infrastructure backlog ranging between $12.0 billion and $15.3 billion, with an annual shortfall in expenditure on existing local infrastructure renewal of between $0.9 billion to $1.2 billion.[72]

Maintaining depreciating assets

1.66Councils manage significant physical assets such as infrastructure (roads, water, sewerage, storm water drains, bridges) and buildings. Many of these assets have long lifespans and are prone to substantial variations in value throughout the duration of council ownership, usually to reflect wear and tear. Initially these assets are measured and presented at their fair value. Over time, ‘assets are re-measured periodically to reflect changes in their current value, with the resulting change, generally, being reflected in an asset revaluation reserve’.[73]

1.67Submitters defined depreciation as:

Depreciation is a planned, gradual reduction in the recorded value of an asset over its useful life by charging it to expense. The use of depreciation is intended to spread expense recognition over the period of time when a business expects to earn revenue from the use of the asset.[74]

1.68The Local Government Association of Queensland estimated that ‘around 20 per cent of local government expenditure is spent on maintaining depreciating assets, compared with less than [six] per cent for the States and less than [two] per cent for the Federal Government’.[75]

1.69Local Government Finance Professionals Queensland were of the view that the current depreciation accounting standard compliance resulted ‘in an overstatement of the expense and negatively impacts on a councils operating performance and financial sustainability forecasts’.[76]

1.70The Country Mayors Association of NSW also commented that depreciation was adversely impacting councils’ financial sustainability:

Local Councils are required to set funds aside for infrastructure maintenance / renewal, contributing significantly to the expenses column in their financials, while also being required to include depreciation for road and plant assets as an expense. This means that costs associated with maintaining capital items are being counted twice and this impacts on perceived performance and borrowing capacity of a council.[77]

1.71Kiama Municipal Council, the Central NSW Joint Organisation, Canberra Region Joint Organisation, Tablelands Regional Council, and Yass Valley Council were all of the view that depreciation provided no taxation offset or benefit for councils:

It is also accepted that in the commercial environment depreciation expenses are integral in determining the profit distribution through dividends, this however is not afforded to councils as there is no taxation offset or benefit.[78]

1.72Local Government Finance Professionals Queensland recommended that Commonwealth and state governments consider adjustments to depreciation reporting requirements for local government:

…to allow depreciation expenses currently required to be recognised for grant funded and contributed assets to be excluded, should councils produce appropriate evidence that they do not plan on replacing those assets in the future.

This change would require discussion between the relevant stakeholders (state governments, Australian Accounting Standards Board, Audit Offices and state local government finance professional bodies to work towards an agreed approach).[79]

Housing supplies

1.73Housing supply is a significant challenge for LGAs nationally. Councils play an essential role in the long-term planning that underpins new housing developments to ensure community liveability and access to basic services.[80] Evidence received has focused on resourcing, planning and approval time frames.

1.74Housing is in the top three issues faced by every regional LGA in WA; where there is little appetite from the private sector to get involved in the housing market in challenging locations.[81] In the NT, an increasing number of properties owned or managed by community housing providers is increasing pressure on local governments due to rate exemptions.[82] Whilst in SA, the 75 per cent rebate for community housing has become a burden for councils because the State Government has transferred a significant number of its properties to the not-for-profit sector in recent years.[83]Housing for key workers, teachers, healthcare and emergency service workers, in regional areas is also a significant issue.[84]

1.75The national housing shortage is also exacerbating local government financial sustainability problems.[85] Only seven per cent of Australian Services Union survey respondents believed their council is appropriately resourced to deliver housing initiatives.[86] Housing is also routinely becoming part of a rural LGAs’ service mix when market failure or service cuts by other levels of government result in declining local services.[87]

1.76Councils are increasingly expected to fund the gap between the infrastructure contributions collected from developers and the current higher construction costs, which is directly impacting on their financial viability.[88]

1.77Backlogs in planning, approval and construction times, is another significant inhibitor to building houses.[89] High levels of community expectations of infrastructure and housing delivery has also arguably led to an increase in poor quality supplies, an inexperienced workforce, which is resulting in unreasonable defects and works requiring remedial measures.[90]

1.78Essential infrastructure elements also need to be in place before the construction of new homes can begin such as water, drainage, electricity and gas, and transportation. Councils rely on developer contributions to fund ‘essential infrastructure, such as water and drainage, so new homes are habitable and connected to existing transport hubs.’[91]

1.79Councils believed however that developer contributions were acting as an impediment to housing and infrastructure development and growth. Macedon Ranges Shire Council commented that developer contributions were not being distributed equally, adding:

…development and growth is not evenly distributed across our shires, and developer contributions are related to the area in which the greatest growth is happening—and rightly so, in terms of servicing those neighbourhoods. However, what that means is: an unequal or uneven distribution, in terms of the benefits, across shires, where other areas or wards may not be experiencing similar growth, and so you end up with ageing infrastructure that's rapidly degrading in some parts of our municipalities, where others are rapidly having investment due to developer contributions and rapid growth in housing.[92]

1.80The Urban Development Institute of Australia reported in 2021 that the majority of lots expected to be delivered in NSW over the next eight years do not have the required infrastructure:

…76 per cent of expected lots needing sewer infrastructure and 70 per cent needing water. 50 per cent of lots anticipated to be delivered in the next [eight]years still require power, roads, or a combination of these. Non‑infrastructure constraints, such as lengthy VPA negotiations and flooding impact 27 per cent of future supply, while 18 per cent of lots face additional issues, including biodiversity offsets and government agency decisions.[93]

1.81The City of Greater Geelong noted that developer contributions do not cover the full cost of providing the necessary community infrastructure in newly developed areas.[94] Circular Head Council submitted that ‘a developer contribution scheme can act to impede or delay new housing supply if not clearly and consistently implemented so that the risk of unanticipated costs for developers (and therefore impact on margins) is minimised’.[95]

1.82Local Government NSW identified that while ‘developer contributions provide some funding for capital costs in new development, they do not provide for recurrent costs, and councils are required to fund the ongoing maintenance, operating and depreciation expense associated with new infrastructure’.[96]

1.83Other issues identified included economic cycles being out of sync with development cycles, a decrease in foreign investment and the need for essential infrastructure development to support new homes.[97]

Environmental obligations

1.84The Committee heard that LGAs are often the custodians of programs requiring compliance with a broad array of Commonwealth, state and NT legislation; ‘all of which bring with them a range of compliance costs and timing implications [which] are felt more acutely in regional and rural councils due to disparate communities with small populations and priorities for [those] communities’.[98]

1.85LGAs play an essential role in the conservation and management of biodiversity and biosecurity for threatened species and are increasingly called upon to ensure compliance with the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act), weed management and climate change regulations, ‘particularly with respect to illegal clearing of federally protected native vegetation and habitat’.[99]

1.86Brisbane City Council highlighted the additional regulatory compliance burden in complying with the EPBC Act to undertake audits, investigations and enforcement to prevent impacts on the community and the environment.[100]

1.87Regional, rural and remote councils ‘have large areas that are national parks, state forests or public reserves which are not rateable and yet must be serviced in terms of access roads, pest and weeds management, biodiversity protection and visitor experience enhancement’.[101]

1.88In addition to compliance with environmental protection legislation, LGAs across Australia commented on increased community expectations for greater environmental conservation and sustainability, as well as a lack of resources and technical expertise, noting:

• an increased community demand for proactive responses to environmental conservation, and sustainability[102]
• impacts on biodiversity and natural ecosystems are requiring local governments to develop and implement conservation strategies to protect local flora and fauna[103]
• environmental obligations, such as managing natural resources, conservation, and climate change mitigation, often require significant financial resources and technical expertise[104]
• the financial strain on local governments hinders their ability to effectively manage environmental challenges, particularly when accompanied by evolving rules and regulations[105]
• councils need dedicated funding streams to support their environmental obligations and sustainable practices.[106]

Climate adaptation management

1.89Australia is experiencing ongoing changes to its weather and climate. The Bureau of Meteorology has observed an increase in the frequency of extreme heat events over land and in the oceans; heavy short-term rainfall events becoming more intense leading to flash flooding; an increase in extreme fire weather, and a longer fire season; and a continued decrease, on average, in cool season rainfall across southern and eastern Australia, which will likely lead to more drought.[107]

1.90Across all LGAs, the average annual damages to council assets as a result of coastal flooding, inland flooding, bushfires, heatwaves, and severe storms are in the range of $90–$120million.[108] The 2022 flood events in NSW, for example, ‘affected 98 out of 128 LGAs, damaged 15,000homes and caused over $5.1 billion of insured damages’.[109] According to a report by Natural Capital Economics, this is expected to increase to between $210–$300 million by 2050, and to between $400–$540 million by 2100.[110]

1.91There was general agreement across most LGAs that mitigating the effects of climate related natural disasters and climate adaptation management was not only essential but also posed a significant financial cost. Local governments are at the forefront of climate change mitigation and adaptation, disaster response, and environmental protection; spending more on environmental protection than other government levels, but lacking resources and expertise to implement all necessary measures.[111]

1.92Local governments face a widening resource gap, limiting their capacity to undertake essential climate change adaptation and mitigation work, which is critical to the sustainability of their communities.[112] The Committee heard that coastal LGAs do not have the financial capacity to meet adaptation challenges;[113] urban councils incur significant and increasing cost impacts in dealing with climate change adaptation and risk management;[114] and regional communities find themselves at the edge of change for climate change, natural disasters and transition while funding to local governments is limited.[115]

1.93The costs of disaster management, including preparation, response, and recovery are increasing, and costs are uneven over space and time. Disasters and extreme weather events do not readily conform to budget processes.[116] The cost of post-disaster recovery has also shifted as the intensity of disasters is exacerbated by climate change.[117] Extreme weather events cause extensive damage to physical infrastructure (roads, coastal structures, and public buildings) leading to costly and extensive repairs disrupting services, including emergency response and waste management, which then diverts resources from other critical areas and puts pressures on planned maintenance schedules.[118] This further impacts councils’ ability to deliver projects and services in financially sustainable ways.[119]

1.94With the scale and timeframes associated with managing climate adaptation measures, town planners and managers are attempting to design for an uncertain future while lacking funding for climate adaptation measures.[120]

1.95As a result of these challenges, the Committee has been advised additional and continued funding is needed to assist local governments to undertake disaster resilience and risk reduction initiatives to manage the physical and social impacts of disasters caused by climate change and natural disasters.[121]

Skills shortages

1.96Local Government Workforce Skills and Capability surveys conducted in WA, NSW and SA noted skills shortages across several varied occupations.

1.97A 2022 survey in WA found that 90 per cent of respondent reported that they were experiencing skills shortages in 2021–22, compared to the 47 per cent in 2018.[122] The top professional occupations experiencing skill shortages in 2020–21, according to the survey, were building surveyors, risk managers, engineers and town planners affecting 21–24 per cent of councils, while trade occupations, customer service workers, labourers and truck drivers experienced the greatest shortages affecting 29–33 per cent of local governments.[123]

1.98A survey conducted in NSW in 2022 found that ‘over 91 [per cent] of surveyed council respondents reported skills shortages, with 66 [per cent] of respondents saying that project delivery had been impacted or delayed by vacancies, skills shortages, skills gaps or training needs’.[124] The top occupations experiencing skill shortages included engineers, urban and town planners, building surveyors, project managers, labourers, information and communication technologies, engineers, urban and town planners, building surveyors and mechanical tradespersons.[125]

1.99The 2022 SA survey found similarly that:

…nine out of every 10 Australian councils are facing jobs and skills shortages, with engineers, planners, building surveyors and environmental health officers all in high demand. Due to these skills shortages, councils resort to recruiting less skilled applicants for engineering, urban and town planning, building surveying and supervisor and team leader roles. Unavoidably, this has had negative repercussions for local government productivity. Often councils can’t afford to pay remuneration that’s comparable to the private sector or other levels of government.[126]

1.100As noted above, state and NT LGAs reported that they were experiencing skills shortages across a wide range of occupations. The majority commented that they were experiencing skills shortages for urban and town planners, engineers, building surveyors and inspectors, engineers, emergency planners, environmental health officers, asset managers, and human resource, healthcare, and childcare professionals. For councils experiencing extreme skills and labour shortages, a lack of skilled labour is becoming more evident when delivering complex infrastructure projects.[127]

1.101The Committee received evidence on how the financial sustainability of LGAs are impacting the recruitment and retention of its workforce. Identified as a key driver was wage and benefits competition between LGAs, state and NT governments, and the private sector, making attracting and retaining suitably qualified workers challenging. For example, local governments are very good incubators in regional WA for developing skills, but they are unable to compete with the resource sector.[128]

1.102Other drivers include:

• the inflationary environment on workforce/skilled labour particularly in the construction industry
• an ageing workforce
• job security
• rate capping making it challenging to offer competitive wages and invest in staff development
• trends towards contracting out essential local government services resulting in less job security for workers and lower wages, and
• a lack of infrastructure, such as housing, schools, retail, and social and medical services, in regional, rural and remote areas.[129]
  103. For regional and rural and remote LGAs, skills shortages are exacerbated by an unwillingness of people to move there, and with salaries being less than those offered in metropolitan centres, there are no incentives available for people to take up employment.[130] Traditionally councils could offset a wage differential through higher job security and conditions, however in the current employment market staff are prepared to sacrifice security for higher earning potential in either the private sector or with larger and better resourced councils in metropolitan and larger regional centres.[131]
  104. Retaining skilled workers is increasingly challenging, and there is a lack of adequate workforce planning across the sector around what is needed to ensure new staff are brought on, whether it be through apprenticeship and traineeship programs or broader recruitment processes, which can be linking wider issues related to housing, community services, and access to TAFE/VET and higher education.[132]
  105. To address workforce shortages, submitters put forward several possible solutions including:
• enhancing local training and education opportunities[133]
• support skilled migration into regional capitals to match skill-based needs[134]
• offering non-cash incentives to attract and retain staff[135]
• provide additional training opportunities and funding to address skill gaps,[136] and
• engaging local education and training providers (secondary schools and TAFE/VET providers)[137]
• establishing a trainee and apprenticeship scheme and apprenticeship hub to improve jobs and skills, particularly in regional areas, and
• establish a Fair Jobs Code for local government aimed at securing employment through placing limits on council’s use of agency and labour hire employment.[138]

Rate pegging

1.106Rate pegging, a NSW and Victorian government policy, restricts the annual amount by which councils can raise rates without applying for a Special Rates Variation. Submitters noted how ‘the financial sustainability of councils has been undermined by rate pegging’.[139]

1.107The Warren Shire Council stated that ‘rate pegging, is increasingly eroding any possibility of financially sustainable local government in NSW and risks the capacity of Council to deliver tailored, grassroots services to our community and properly deliver and maintain vital local infrastructure’.[140] Yass Valley Council stated that the practice ‘constrains Council’s own source revenues from property rates and user chargers would need to be significantly increased to fill the gap’.[141] The Country Mayors Association of NSW suggested that rate pegging had resulted in much lower council rates; 41 per cent lower than the national average.[142]

1.108However, Adjunct Professor Brian Dollery believed that abolishing rate pegging would not make many local councils financially sustainable as ‘many local councils in regional, rural or remote areas have neither the population nor rate base to generate sufficient funding for essential local services, new infrastructure and adequate staffing’.[143]

Airport infrastructure

1.109Over time, the ownership of many Australian Government airports has been steadily transferred to local governments. Between 1989 and 1993 local governments were given full management and financial responsibility for these airports. The Australian Airports Association noted that ‘under their transfer deeds, local governments are obliged to continue owning and operating these aerodrome facilities unless they receive permission from the Australian Government to either close or privatise these airports’.[144] There are 200 regional and rural airports owned and operated by councils across Australia with more than half of all local governments in rural areas responsible for an airport or aerodrome in some form.[145]

1.110The Australian Local Government Association and Institute of Public Works Engineering Australasia’s 2024 State of the Assets report stated that Australia’s airports and aerodromes were either in poor condition or have poor function or capacity.[146] Key challenges included regional airports ‘operating runways and infrastructure that is 70+ years old, with substantial upgrades needed to meet modern aviation safety standards’ and regional airports have negative operating margins, and rely ‘on local government or other financial assistance to cover their operating, maintenance and upgrading costs’.[147]

1.111Complying with aviation regulatory reforms are changing infrastructure and service delivery obligations for local governments that own or operate airports.[148] The Australian Airports Association highlighted a number of challenges including:

• new regulatory requirements for all ‘certified’ aerodromes to review their practices, facilities, and manuals to ensure they reflect the new standards required significant effort by local governments to ensure compliance, often coming at a major cost in time and money to councils and airports
• aviation security reforms for some local governments increased costs of airport operations and added an additional compliance burden
• heavier newer aircraft, decarbonisation of domestic aviation and climate adaptation management are placing intensive demands on airport infrastructure.[149]
  112. Kimberley Regional Council identified a number of key issues that they believed airports faced including: ‘low annual passenger movements; limited opportunities for diversified revenue streams; limited capacity to borrow funds; limited ability to attract and retain highly qualified staff; ageing airport infrastructure; high operational costs for aviation security screening; high cost of doing business due to remoteness.’[150] They added that competitive funding was making it difficult to manage and implement critical upgrades and that regional and remote airports had a higher expenditure compared to major airports and major regional airports (12 per cent of total expenditure, compared to about four per cent).[151]
  113. The Rural City of Wangaratta stated that there was no Australian Government support for the essential service of their aerodrome which was required to ensure ongoing maintenance and development.[152] The Australian Local Government Association stated that ‘most councils do not have the capability or capacity to raise the necessary funding for airports through their operational revenue’.[153]

Additional concerns

1.114Submitters also raised varied concerns that they believed were placing additional financial pressure on councils including: the indexation freeze on Financial Assistance Grants; the Commonwealth distribution formula; unwanted infrastructure added to councils’ portfolios though election commitments; transitioning and hosting grid-scale renewable energy projects.

1.115The Grattan Institute noted that the ‘combined impact of the indexation freeze and [consumer price] indexation has led to a funding gap in 2023 of close to $600million’.[154] The Victorian Grants Commission estimated that ‘rural and regional councils have foregone $125 million in revenue in the five years since the indexation was paused’.[155]

1.116The Northern Beaches Council stated that the ‘indexation method ([consumer price index] and population growth) does not recognise the cost pressures on councils, and this gap was further widened by the [three]-year indexation freeze on the Financial Assistance Grant from 2014–15 to 2016–17’.[156]

1.117Local Government Professionals Australia suggested that the Commonwealth Government should address grant funding lost during the 2014–15 indexation freeze.[157]

1.118Kiama Municipal Council’s submission stated that ‘assets are added to councils’ portfolios, due to growth driven by communities, and election commitments, but no grants provided by State and Federal government for maintaining the asset/depreciation’.[158]

1.119The Shire of Cuballing believed that discretionary funds and grants programs were being ‘allocated to election commitments rather than deserving projects with an identified need, business case and matching funding in a safe opposition electorate’.[159]

1.120The Canberra Region Joint Organisation noted an additional financial burden placed on councils from election commitments:

These commitments are made following requests from the community with little consultation with council, particularly where the government changes. Generally, these assets (or liabilities) are not income-generating however the depreciation expense continues to hit the bottom lines of councils.[160]

Other inquiries and reviews

1.121Over the past two years, the state governments of Victoria, NSW and Tasmania have undertaken inquiries into their respective local governments:

• Parliament of NSW: Inquiry into the ability of local governments to fund infrastructure and services[161]
• Parliament of Victoria: Inquiry Local Government funding and services[162]
• Tasmanian Government: Future of Local Government Review.[163]
  122. Evidence gathered from the state inquiries serves to enhance and corroborate the evidence received for this inquiry to date, providing a more comprehensive understanding of the issues at hand as the Committee works towards presenting its final report.

Committee comment

1.123The role of local governments in Australia has changed significantly over time. Councils must navigate complex regulatory environments, manage limited financial resources, and address diverse and sometimes competing community needs and expectations.

1.124Ensuring financial sustainability is a key challenge for LGAs in this evolving environment. Funding for local governments comes from various sources, including taxes in the form of rates, charges for the sale of goods and services, and grants from Commonwealth, state and NT governments. Councils must balance their budgets while maintaining service delivery and investing in infrastructure.

1.125Submitters put forward wide ranging recommendations aimed at improving the sustainability of local governments. Given the significant number of recommendations put forward to this inquiry by participants, it is challenging to list them all here. A brief overview of some of the key recommendations made by LGAs includes:

• review the Financial Assistance Grants program including:

• minimum Financial Assistance Grants restored to one percent of Commonwealth taxation revenue
• remove fixed co-contribution and short delivery timeline requirements of grants
• set the duration of funded programs a minimum of three to five years to enable for delivery stability and quality
• Commonwealth Government establish a new allocative, permanent funding program for local governments
• increase Financial Assistance Grant funding for smaller regional, rural and remote councils based on relative need

• review the Intergovernmental Agreement on Federal Financial Relations
• ensure the allocation of grants are consistent with horizontal equalisation between councils in all jurisdictions, reflecting the different expenditure needs and revenue capacities of councils in different states
• the Commonwealth Government consider the role local governments play, and the appropriateness of funding made available to First Nations councils in achieving the objectives of the National Agreement on Closing the Gap
• address skills shortages through:

• increase programs that will improve labour availability such as upskilling, retraining, skilled migration and re-evaluate migration policy to enable access to select highly skilled experts
• develop mechanisms for public/private partnerships to address service gaps
• incentivise workers to relocate to local government regional, rural and remote areas
• develop education pathways to promote local government specific skills for regional areas
• review international best practice of workforce incentive programs and potential application in the Australian context

• consider local governments’ role in National Cabinet and ministerial forums
• consider developing a new tripartite agreement between all three levels of government, that ends the cost shifting onto local governments
• consider making councils eligible for Fringe Benefit Tax exemptions and concessions
• the Commonwealth Government to amend the Fair Work Act 2009 (Cth) to regulate the provision of labour hire services by national system employers to state system local governments
• the Department of Defence and other Commonwealth agencies to contribute to infrastructure required to service their operations
• develop a national working group to proactively prepare and mitigate natural disasters and climate change impacts, with funding for local programs.
  126. The Committee is thoroughly reviewing the substantial evidence it has received to date and will announce its final recommendations in due course.
  127. The Committee wishes to express is appreciation to all the LGAs, councils, shires, Commonwealth, state and NT governments and their respective departments, peak bodies, the Australian Services Union, the United Services Union, academics, organisations and individuals who have not only taken the time to provide a submission to this inquiry but also provided their valuable insights and expertise at public hearings.

Mr Luke Gosling OAM, MP
Chair

13 February 2025

Footnotes

[1]Australian Bureau of Statistics, ‘Local Government Areas‘, https://www.abs.gov.au/statistics/standards/australian-statistical-geography-standard-asgs-edition-3/jul2021-jun2026/non-abs-structures/local-government-areas, accessed 15 November 2024.

[2]Local Government Information Unit, ‘Facts and figures: Australia’, https://lgiu.org/resources/local-government-facts-and-figures/facts-and-figures-australia/, accessed 15 November 2024.

[3]Centre for Population, ‘Fastest growing Local Government Areas’, https://population.gov.au/population-topics/topic-growth-lga, accessed 7 November 2024.

[4]Centre for Population, ‘Fastest growing Local Government Areas’, https://population.gov.au/population-topics/topic-growth-lga, accessed 7 November 2024.

[5]Parliamentary Education Office, ‘How does the Commonwealth Constitution create a third level of Government?’, https://peo.gov.au/understand-our-parliament/your-questions-on-notice/questions/how-does-the-commonwealth-constitution-create-a-third-level-of-government, accessed 20 November 2024.

[6]Parliamentary Education Office, ‘How does the Commonwealth Constitution create a third level of Government?’, https://peo.gov.au/understand-our-parliament/your-questions-on-notice/questions/how-does-the-commonwealth-constitution-create-a-third-level-of-government, accessed 20 November 2024.

[7]Parliamentary Education Office, ‘How does the Commonwealth Constitution create a third level of Government?’, https://peo.gov.au/understand-our-parliament/your-questions-on-notice/questions/how-does-the-commonwealth-constitution-create-a-third-level-of-government, accessed 20 November 2024.

[8]Adjunct Professor Graham Sansom, Submission 280, p. 2.

[9]Section 96 of the Australian Constitution allows the federal government to grant money to the states and to tell the states how this money is to be spent.

[10]Australian Bureau of Statistics, ‘Taxation Revenue, Australia methodology’, https://www.abs.gov.au/methodologies/taxation-revenue-australia-methodology/2022-23, accessed 20 November 2024.

[11]Standing Committee on Economics, Finance and Public Administration, Rates and Taxes: A Fair Share for Responsible Local Government, October 2003, Appendix F.

[12]Department of Infrastructure, Transport, Regional Development, Communications and the Arts, ‘Financial Assistance Grant to Local Government’, https://www.infrastructure.gov.au/territories-regions-cities/local-government/financial-assistance-grant-local-government, accessed 20 November 2024.

[13]Department of Infrastructure, Transport, Regional Development, Communications and the Arts, ‘Financial Assistance Grant to Local Government’, https://www.infrastructure.gov.au/territories-regions-cities/local-government/financial-assistance-grant-local-government, accessed 20 November 2024.

[14]Department of Infrastructure, Transport, Regional Development, Communications and the Arts, ‘Financial Assistance Grant to Local Government’, https://www.infrastructure.gov.au/territories-regions-cities/local-government/financial-assistance-grant-local-government, accessed 20 November 2024.

[15]Department of Infrastructure, Transport, Regional Development, Communications and the Arts, ‘National principles for the allocation of grants under the Local Government (Financial Assistance) Act 1995’, https://www.infrastructure.gov.au/territories-regions-cities/local-government/financial-assistance-grant-local-government/national-principles-allocation-grants, accessed 20 November 2024.

[16]Australian Bureau of Statistics, ‘Taxation Revenue, Australia methodology’, https://www.abs.gov.au/methodologies/taxation-revenue-australia-methodology/2022-23, accessed 20 November 2024.

[17]Grattan Institute, Submission 74, p. 16.

[18]Adjunct Professor Graham Sansom, Submission 280, p. 6.

[19]Canberra Region Joint Organisation, Submission 258, p. 15; Byron Shire Council, Submission 82, p. 3; South Gippsland Shire Council, Submission 49, p. 1; Shire of Shark Bay, Submission 76, p. 2; Upper Hunter Shore Council, Submission 24, p. 2; Muswellbrook Shire Council, Submission 177, p. 5.

[20]Murrindindi Shire Council, Submission 217, p. 5.

[21]Grattan Institute, Submission 74, p. 18.

[22]Murrindindi Shire Council, Submission 217, p. 4.

[23]Murrindindi Shire Council, Submission 217, p. 4.

[24]Shire of Wyndham East Kimberley, Submission 67, p. 2.

[25]Western Australian Local Government Grants Commission, Submission 218, p. 2.

[26]Mansfield Shire Council, Submission 210, p. 1.

[27]Western Queensland Alliance of Councils, Submission 176, p. 3.

[28]City of Moreton Bay, Submission 99, p. 5; Shire of Chapman Valley, Submission 93, p. 5; Shire of Morawa, Submission 88, p. 5; Yarra Ranges Council, Submission 73, p. 3; Mid Murray Council, Submission 260, p. 5; City of Ballarat, Submission 251, p. 3; City of Greater Gelong, Submission 207, p. 9.

[29]Western Australian Local Government Association, Submission 96, p. 6; Local Government Association of Queensland, Submission 257, p. 36, Canberra Region Joint Organisation, Submission 258, p. 6, Grattan Institute, Submission 74, p. 16; Civil Contractors Federation, Submission 247, p. 3; Regional Capitals Alliance of WA, Submission 124, p. 6.

[30]Kimberly Regional Group, Submission 123, p. 2; Australian Logistics Council, Submission 107, p. 2; Central Desert Regional Council, Submission 9, p. 4.

[31]Department of Infrastructure, Transport, Regional Development, Communications and the Arts, Submission 38, pages. 19-32.

[32]Local Government Association of Queensland, Submission 257, p. 3.

[33]Country Mayors Association of NSW, Submission 188, p. 22.

[34]Local Government Association of the Northern Territory, Submission 86, p. 3.

[35]Mayor Dean Johnson, President, Local Government Association of South Australia, Committee Hansard, 7June 2024, p. 3.

[36]Mr Dion Lester, Chief Executive Officer, Local Government Association of Tasmania, Committee Hansard, 25July 2024, p. 7.

[37]Mrs Darriea Turley, President, Local Government NSW, Committee Hansard, 25 July 2024, p. 11.

[38]Mr Simon Millcock, Chief Executive Officer, Northern and Yorke Local Government Association, Committee Hansard, 27 September 2024, p. 33.

[39]Councillor Karen Chappel, President, Western Australian Local Government Association, Committee Hansard, 7 June 2024, p. 6.

[40]Ms Trisha Garrett, First Assistant Secretary, Service Delivery Division, Ageing and Aged Care Group, Department of Health and Aged Care, Committee Hansard, 4 July 2024, p. 2.

[41]Mr Peter Tegart, Partner, Always Thinking Advisory, Committee Hansard, 25 July 2024, p. 25.

[42]Mr Dion Lester, Chief Executive Officer, Local Government Association of Tasmania, Committee Hansard, 25July 2024, p. 7.

[43]Ms Samantha Batchelor, Tasmanian Coordinator, Australian Services Union, Committee Hansard, 25September 2024, p. 28.

[44]Mr Ed Small, Director, Corporate and Governance Services, Moyne Shire Council, Committee Hansard, 26September 2024, p. 29.

[45]Mrs Darriea Turley, President, Local Government NSW, Committee Hansard, 25 July 2024, p. 11.

[46]Australian Local Government Association, Submission 181, p. 1.

[47]Regional Development Australia Tasmania, Submission 155, p. 2.

[48]Corangamite Shire Council, Submission 77, p. 4.

[49]Local Government Association of Queensland, Submission 257, p. 22.

[50]Lockhart Shire Council, Submission 19, p. 3.

[51]Mr David Reynolds, Chief Executive, Local Government NSW, Committee Hansard, 25 July 2024, p. 12

[52]Knox City Council, Submission 105, p. 9.

[53]Suicide Prevention Australia, Submission 136, p. 2.

[54]Western Queensland Alliance of Councils, Submission 176, p. 43.

[55]Campaspe Shire Council, Submission 172, p. 8.

[56]National Growth Areas Alliance, Submission 228, p. 7.

[57]Redland City Council, Submission 209, p. 15.

[58]Mayor Dean Johnson, President, Local Government Association of South Australia, Committee Hansard, 7June 2024 p. 1.

[59]Rural Councils Victoria, Submission 138, p. 6; Western Queensland Alliance of Councils, Submission 176, p. 2; Hindmarsh Shire Council, Submission 169, p. 3; Always Thinking Advisory, Submission 80, p. 4; Glen Eira City Council, Submission 33, p. 9; Broken Hill Shore Council, Submission 261, p. 2; Local Government Association of QLD, Submission 257, p. 4; Regional Capital Alliance of Western Australia, Submission 124, p. 8.

[60]Kiama Municipal Council, Submission 75, p. 13.

[61]Indigo Shie Council, Submission 29, p. 3.

[62]Knox City Council, Submission 105, p. 9.

[63]Infrastructure Australia, An Assessment of Australia’s Future Infrastructure Needs, The Australian Infrastructure Audit 2019, pages. 57-73.

[64]Mrs Darriea Turley, President, Local Government NSW, Committee Hansard, 25 July 2024, p. 9.

[65]Mr Stephen, Hughes, Northern Manager, United Services Union, Committee Hansard, 25 July 2024, p. 28.

[66]Australian Services Union, Submission 140. p. 11.

[67]Mr Stephen, Hughes, Northern Manager, United Services Union, Committee Hansard, 25 July 2024, p. 28.

[68]Mr Peter Tegart, Partner, Always Thinking Advisory, Committee Hansard, 25 July 2024, p. 23.

[69]City of Mount Gambier, Submission 65, p. 4.

[70]Local Government Association of South Australia, Submission 95, p. 20.

[71]Grattan Institute, Submission 74, p. 13.

[72]Emeritus Professor Brian Dollery, Submission 68, p. 5.

[73]CPA Australia, A guide to understanding the financial reports of local governments.

[74]Central NSW Joint Organisation, Submission 109, p. 5; Kiama Municipal Council, Submission 75, p. 5; Country Mayors Association of NSW, Submission 188, p. 11; Murry River Council, Submission 14, p. 6.

[75]Local Government Association of Queensland, Submission 257, p. 37.

[76]Local Government Finance Professionals Queensland, Submission 244, p. 11.

[77]Country Mayors Association of NSW, Submission 188, p. 10.

[78]Kiama Municipal Council, Submission 75, p. 6; Central NSW Joint Organisation, Submission 109, p. 5; Canberra Region Joint Organisation, Submission 258, p. 3; Tablelands Regional Council, Submission 235, p. 2; Yass Valley Council, Submission 164, p. 3

[79]Local Government Finance Professionals Queensland, Submission 244, p. 11.

[80]Australian Local Government Association, Submission 181. p. 13.

[81]Mr Jamie Criddle, Chief Executive Officer, Shire of Chapman Valley, Committee Hansard, 28 August 2024, p.19.

[82]City of Palmerston, Submission 71. p. 2.

[83]Grattan Institute, Submission 74, p. 12.

[84]Shire of Chapman Valley, Submission 93. p. 2.

[85]Regional Cities Victoria, Submission 236. p. 3.

[86]Australian Services Union, Submission 140. p. 5.

[87]Canberra Region Joint Organisation, Submission 258. p. 4.

[88]National Growth Areas Alliance, Submission 228. p. 4.

[89]Mr Nicholas Proud, CEO, Civil Contractors Federation, Committee Hansard, 15 August 2024, p. 2.

[90]City of Cockburn, Submission 141. p. 18.

[91]Standing Committee on Tax and Revenue, Inquiry into housing affordability and supply in Australia, Submission 78, p. 2.

[92]Ms Adele Drago-Stevens, Director, Corporate, Macedon Ranges Shire Council, Committee Hansard, 26 September 2024, pages. 2–3.

[93]Urban Development Institute of Australia (NSW), Greenfield Land Supply pipeline Report, June 2021, p. 5.

[94]City of Greater Geelong, Submission 207, p. 8.

[95]Circular Head Council, Submission 12, p. 3.

[96]Local Government NSW, Submission 186, p. 32.

[97]Mr Nicholas Proud, CEO, Civil Contractors Federation, Committee Hansard, 15 August 2024, pages 2–3.

[98]East Gippsland Shire Council, Submission 162, p. 10.

[99]Campaspe Shire Council, Submission 172, p. 6.

[100]Councilor Fiona Cunningham, Civic Cabinet Chair, Finance and City Governance Committee, Brisbane City Council, Committee Hansard, 18October 2024, pages 6–7.

[101]Canberra Region Joint Organisation, Submission 258, pages 9–10.

[102]City of Cockburn, Submission 141, p. 22.

[103]Municipal Association of Victoria, Submission 97, p. 21.

[104]West Wimmera Shire Council, Submission 28, p. 3.

[105]Western Queensland Alliance of Councils, Submission 176, p. 7.

[106]Mr David Arnold, Chief Executive Officer, Central Western Queensland Remote Area Planning and Development Board, Committee Hansard, 18October 2024, p. 27.

[107]Bureau of Meteorology, State of the Climate 2024.

[108]Natural Capital Economics Pty Ltd, Adaptive Community Assets. A report prepared for the Eastern Alliance for Greenhouse Action, 22 March 2023, pages iii and 4.

[109]NSW Department of Planning, Housing and Infrastructure, Submission 255, p. 28.

[110]Natural Capital Economics Pty Ltd, Adaptive Community Assets. A report prepared for the Eastern Alliance for Greenhouse Action, 22 March 2023, pages iii and 4.

[111]Australian Local Government Association, Submission 181, pages 4 and 8.

[112]Victorian Greenhouse Alliances, Submission 219, p. 2.

[113]Councillor Sarah Race, Submission 151, p. 1.

[114]Merri-bek City Council, Submission 60, p. 5.

[115]Australian Rural Leadership Foundation, Submission 208, p. 2.

[116]La Trobe Climate Change Adaptation Lab, Submission 41, p. 4.

[117]Public Skills Australia, Submission 118, p. 3.

[118]District Council of Streaky Bay, Submission 231, p. 2.

[119]City of Onkaparinga, Submission 69, p. 2.

[120]Australian Coastal Councils Association, Submission 58, p. 9.

[121]Local Government Association of Queensland, Submission 257, p. 30.

[122]Western Australian Local Government Association, Submission 96, p. 12.

[123]Western Australian Local Government Association, Submission 96, p. 12.

[124]NSW Department of Planning, Housing and Infrastructure, Submission 255, p. 31.

[125]NSW Department of Planning, Housing and Infrastructure, Submission 255, p. 31.

[126]Local Government Association of South Australia, Submission 95, p. 21.

[127]Town of Port Hedland, Submission 48, p. 3; Mr Robert Potter, National Secretary, Australian Services Union, Committee Hansard, 25 July 2024, p.15; Mr Michael Boyle, President, Civil Contractors Federation, Committee Hansard, 15 August 2024, p. 6.

[128]Mr Nick Sloan, Chief Executive Officer, Western Australian Local Government Association, Committee Hansard, 7 June 2024, p. 5.

[129]For example, see Mayor Kylie Boston, District Council of Grant, Committee Hansard, 27 September 2024, p.21.

[130]Central Desert Regional Council, Submission 9, p. 1.

[131]Canberra Region Joint Organisation, Submission 258, p. 4.

[132]Ms Samantha Batchelor, Tasmanian Coordinator, Australian Services Union, Committee Hansard, 25September 2024, p. 29.

[133]Australian Services Union, Submission 140, p. 3.

[134]Regional Capitals Alliance of WA, Submission 124, p. 10.

[135]Western Queensland Alliance of Councils, Submission 176, p. 37.

[136]Western Queensland Alliance of Councils, Submission 176, p. 38.

[137]Torrens University Australia, Submission 35, p. 3.

[138]Australian Services Union, Submission 140, pages. 3-4.

[139]Local Government NSW, Submission 186, p. 7.

[140]Warren Shire Council, Submission 81, p. 5.

[141]Yass Valley Council, Submission 164, p. 2.

[142]Country Mayors Association of NSW, Submission 188, p. 6.

[143]Adjunct Professor Brian Dollery, Submission 68, p. 5.

[144]Australian Airports Association, Submission 259, p. 2.

[145]Institute of Public Works Engineering Australasia and Australian Local Government Association, 2024 National State of the Assets Report, July 2024, p. 6; Department of Infrastructure, Transport, Regional Development, Communications and the Arts, Submission 38, p. 10.

[146]Institute of Public Works Engineering Australasia and Australian Local Government Association, 2024 National State of the Assets Report, July 2024, p. 4.

[147]Institute of Public Works Engineering Australasia and Australian Local Government Association, 2024 National State of the Assets Report, July 2024, p. 40.

[148]Australian Airports Association, Submission 259, p. 4.

[149]Australian Airports Association, Submission 259, p. 4.

[150]Kimberley Regional Council, Submission 123, p. 18.

[151]Kimberley Regional Council, Submission 123, p. 19.

[152]Rural City of Wangaratta, Submission 125, p. 7.

[153]Australian Local Government Association, Submission 181, p. 36.

[154]Grattan Institute, Submission 74, p. 5.

[155]Baw Baw Shire Council, Submission 183, p. 17.

[156]Northern Beaches Council, Submission 117, p. 2.

[157]Local Government Professionals Australia, Submission 168, p. 3.

[158]Kiama Municipal Council, Submission 75, p. 6.

[159]Shire of Cuballing, Submission 46, p. 5.

[160]Canberra Region Joint Organisation, Submission 258, p. 3.

[161]Parliament of NSW, ‘Ability of local governments to fund infrastructure and services’, https://www.parliament.nsw.gov.au/committees/inquiries/Pages/inquiry-details.aspx?pk=3040, accessed 9 December 2024.

[162]Parliament of Victoria, ‘Inquiry into Local Government funding and services’, https://www.parliament.vic.gov.au/localgovernmentfunding, accessed 9 December 2024.

[163]Tamanian Department of Premier and Cabinet, The Future of local government review, Final Report, October 2023.