Australian Politics and Policy - Senior, 2019a

Australian Politics and Policy
Major challenges
In addition to the problems of a growing service-delivery task and stagnant revenue
bases, major challenges facing contemporary Australian local governments include
rising maintenance costs for ageing assets; shifting community needs and expectations
about the role of local government in responding to economic, social and
environmental problems; reluctance to change existing service-delivery models;
and increasingly fragmented, multi-sector, multi-level service-delivery governance
frameworks. 47
Local government assets
Most local government assets are long lived and not traded in markets. Even though
these assets are crucial to the economic and social vitality and everyday functioning
of communities, there is a ‘massive backlog of new projects and maintenance
and upgrade projects’. 48 A 2006 national study estimated the Australia-wide cost
of restoring local government infrastructure was between $12 billion and $15.3
billion. 49 Comrie suggests that since asset lifespans are difficult to predict, there
may be ‘some uncertainty as to the reliability of local government expenses’. 50
Indeed, there is evidence that the total operating expenses of Australia’s local
governmentsexceedtheirrevenueandthatthesectorisinanetnegativefinancial
position. 51 This has led to observation by some that local government faces
worsening financial sustainability and the emergence of a massive infrastructure
backlog. 52
Other factors that have raised interest in the financial capacity of local
governments to manage assets over recent decades include:
• an increased range of responsibilities and expenditure without growing
revenues as property rates are volatile and fluctuate with land valuations
• additional service needs in urban and coastal areas that are experiencing rapid
population growth, and financial challenges for rural local governments that
are experiencing population and revenue decline
• concern that local government assets are ageing and renewal expenditure is
not occurring at the rate necessary to maintain existing service levels, let alone
meet citizens’ rising expectations. 53
47 See Walker and Gray 2012, 5.
48 Campbell 2011, 2.
49 Campbell 2011, 2.
50 Comrie 2013, 9–12.
51 Comrie 2013, 9–12.
52 Dollery, Goode and Grant 2010, 81.
53 Comrie 2013, 8.
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