PwC to examine fiscal pressure facing Australia's 700 councils
1 June 2006
The Australian Local Government Association has commissioned financial consultants PricewaterhouseCoopers to undertake a major study of local government financing, with a report due later this year.
ALGA President, Cr Paul Bell, said that it was becoming widely recognised that Australia's 700 councils were facing increasing fiscal pressure and that concerted action by all three spheres of government was needed to address the problems.
"We have had independent inquiries in South Australian and New South Wales highlight the extent and nature of the problem at the state level. We now need a national study that will draw on work completed to date and highlight the key issues that need to be addressed," Cr Bell said.
"Councils are faced with; escalating demand for human services; increasing costs of maintaining and renewing local infrastructure, much of it reaching the end of its useful life; widespread cost-shifting to councils by other spheres of government; rapidly ageing populations and areas of significant demographic change, putting pressure on revenue and services; and lack of real growth in state and federal grants.
"ALGA has argued long and hard that - at the federal level - we need to move away from the system of financial assistance grants to a fair share - at least one per cent - of federal taxation revenue.
"The PwC study will, among other things:
- assess the current and long-term financial sustainability of the local government sector;
- identify the key financial issues affecting the financial sustainability of local government;
- identify any trends and/or differences between groups of councils based on size, density of settlement and rate of growth or decline;
- develop recommendations for improved financial sustainability of local government including financial governance and potential sources of additional revenue;
- investigate the appropriateness of reform to current intergovernmental financial transfers with a view to develop a new model for intergovernmental financial relations that will promote the financial sustainability of local government.
"We are particularly pleased that the project will benefit from PricewaterhouseCoopers highly respected financial work and from the insight of Grahame Morris, PwC's Chairman of Federal Government Services.
"The results of the study will form the basis of submissions to the major parties later this year, well in advance of the 2007 federal election.
"We will put the strongest possible case to the major parties for fair federal funding and will expect equally strong policy responses in the lead up to the federal poll," Cr Bell said.
- Contact
- Cr Paul Bell AM, ALGA President - 0418 791 596
- Rohan Greenland, ALGA Public Affairs - 0412 85 9434 / 02 6122 9434
