Projects & Partnerships

Financial Sustainability

Introduction
LGMA 2050 - The Way Forward
Surveys

Introduction

After the Federal Treasurer released the Productivity Commission’s Terms of Reference for a Study into Local Government Revenue Raising Capacity in April 2007, LGMA was keen to contribute from a practitioners’ point of view. LGMA engaged Mark McKenzie-McHarg, Mach II Consulting, to assist with the research, coordination and development of a submission to the Productivity Commission to:

• identify the key issues to the sector’s revenue raising capacity through consultation with the sector and the key practitioners; 
• using the sector’s skills and expertise undertake detailed analyses of the issues and bring forward practical ideas to benefit the sector’s revenue raising capacity; and 
• move the debate towards a long term solution to achieve financial sustainability for the sector.

An industry issues paper was prepared and referred to authorities for comment. LGMA identified two ways forward in tackling the submission to the Productivity Commission. To respond:

• by reiterating the results of the road well travelled by the Hawker Inquiry, Financial Sustainability studies and the PWC Report, which identified the key issues surrounding Local Government Financial Sustainability.
• along the lines of what will suit Local Government in 2050/2100. That we use the Study process and our submission to explore a new fiscal direction for Local Government in a nation building context.

What is the fiscal/financial structure that will support a well resourced and autonomous system of Local Government in 50 years time?

Whilst the overwhelming response from the sector invited the LGMA to follow the more strategic and futuristic option, there were words of caution that we shouldn’t leave the obvious unsaid. The LGMA ran a national forum in conjunction with the Revenue Management Association and the Local Government Finance Professionals where considerable debate took place about the issues impacting on local government revenue raising capacity.The Productivity Commission representatives, Presiding Commissioner Judith Sloan and Associate Commissioner Cliff Walsh, attended the national forum and heard the conclusions drawn by the Forum participants.

As a result of the forum, LGMA entered into a dialogue with the Productivity Commission to ensure that there was a degree of understanding of how the sector works and the limitations in relation to the current fiscal/financial system. The LGMA National Board at its August meeting adopted the submission - Local Government Revenue Raising Capacity - for referral to the Productivity Commission’s Local Government Revenue Raising Capacity Study.

LGMA National undertook detailed consultation with the sector to identify the essential ingredients for a new fiscal/financial system that will direct Local Government towards 2050/2100.

LGMA 2050 - The Way Forward

A key platform of the local government sectors' productivity commission submission was that a forum be convened on the Gold Coast in May 2008 to address a range of ‘challenging’ and provocative strategic questions in relation to a more sustainable financial future for local government.

The forum was intended to start a strategic conversation about the challenges that face the sector and identify a path forward to further address the important strategic financial sustainability of local government.

LGMA 2050 - The Way Forward is a result of the first phase of crucial strategic conversations about local government financial sustainability with key sector interest groups.

Surveys

LGMA has conducted the following research into the financial sustainability of local governments in 2050.  These include:

• Global Financial Crisis - The impact of GFC (Global Finacial Crisis) on Councils [results pending]
• LGMA Financial Sustainability Survey Results [download - pdf file]