The Federation Press

Funding the Future

Financial Sustainability and Infrastructure Finance in Australian Local Government

Overview

For the past several decades, Australian local government has faced relentless financial pressures. In attempting to maintain service levels, most local authorities have invested too little in local infrastructure maintenance and renewal. The main symptom of this malaise has been a burgeoning infrastructure backlog, which now far exceeds the fiscal capacity of a majority of councils. Various remedial policy measures have been espoused to relieve this financial distress, most notably structural reform programs based on forced mergers. However, compulsory consolidation has failed to achieve its intended aims, and financial unsustainability has become more acute. Obviously other avenues must now be pursued if Australian local government is to remain viable.

Funding the Future represents a pioneering attempt to comprehensively explore and assess financial sustainability in Australian local government. It focuses on Australian fiscal federalism and the place of local government in this structure, it provides a critical assessment of methodologies and findings of the various national and state public inquiries into financial sustainability in local government, it offers an exploration of ‘holistic sustainability’ as distinct from the narrower ‘financial sustainability’ in local government, and it presents a detailed assessment of different approaches to local infrastructure funding, including an Australian municipal bond market, a Commonwealth local infrastructure fund, municipal banking and an Australian municipal bond bank. While the emphasis falls squarely on Australian local government, Funding the Future draws on extensively on both the international conceptual and empirical literature.

Table of Contents

Introduction
Introduction
Outline of book

Part A: Australian Fiscal Federalism and Australian Local Government

Australian Fiscal Federalism
Introduction
The Australian federal system of government
Public finance
Vertical fiscal imbalance
Horizontal fiscal equalisation
Concluding remarks

Australian Local Government Finance
Introduction
Local government expenditure
Local government revenue
Financial Assistance Grants
Concluding remarks

Part B: Financial Sustainability and Australian Local Government

Public Perspectives on Financial Sustainability
Introduction
Financial reform and financial sustainability
Policy and practice implications for financial sustainability

Holistic Sustainability in Australian Local Government
Introduction
Meaning of sustainability
Tensions between local government democracy and local government efficiency
Academic approaches to sustainability in local government
Local government failure
Holistic sustainability in local government
Concluding remarks

Part C: Financing Australian Local Government Infrastructure

Australian Local Government Finance
Introduction
Commonwealth infrastructure funding of local government
Concluding remarks

Commonwealth Government Infrastructure Fund
Introduction
Roads to Recovery and the nation building economic stimulus plan
The case for a Commonwealth asset fund
Evaluation
Concluding remarks

Municipal Bond Markets
Introduction
Local infrastructure renewal in New South Wales
US municipal infrastructure finance
Rationale for asset-backed securities
Asset-backed securities by local water utilities
Concluding remarks

An Australian Local Government Bond Bank
Introduction
Municipal banking
Municipal bond banks
Case studies
Concluding remarks

References
Index

Of interest...