A new inquiry is underway that will see the House of Representatives Standing Committee on Regional Development, Infrastructure and Transport examine the financial sustainability of local governments. 

Chair of the committee, Luke Gosling, said that the committee has prioritised a deeper understanding of local government financial sustainability and funding frameworks, alongside the changing infrastructure requirements and service delivery obligations for local governments. 

“Local government sustainability is essential to supporting our Australian communities through the provision of vital infrastructure and related services,” Mr Gosling said. 

“The committee is seeking to understand the challenges faced by local governments in servicing infrastructure requirements across Australia’s regional, rural, and remote locations.” 

Mr Gosling said that the committee is aware of significant public infrastructure workforce shortages, particularly in local government areas, and the importance of promoting skills development and job security for Australians. 

“The committee will examine labour hire and retention trends, including the impacts of labour hire practices, to identify barriers and opportunities to support our local workforce and local government sustainability and service delivery obligations.”

The committee is welcoming submissions from interested organisations and individuals until 3 May 2024. 

Inquiry welcomed

ALGA President, Linda Scott, said that councils are constantly being asked to do more – by their communities and state and territory governments – but aren’t being funded to deliver on these responsibilities.

“ALGA’s research shows that over the past decade local government expenditure per capita has flatlined, while spending by other governments has continued to rise,” Cr Scott said.

“It’s encouraging that the changing infrastructure and service delivery obligations of local government have been recognised and included in the inquiry’s terms of reference.

“By providing a wide range of free and low-cost services, we are delivering real cost of living relief in our local communities, but need more sustainable funding.

“ALGA looks forward to presenting to the inquiry on the challenges Australian local governments are facing, and how we can work collaboratively to set councils and our communities up for success.”

Recent reports from the Local Government Association of Queensland and Local Government NSW have highlighted the impact of cost shifting in these jurisdictions. 

“New research from Queensland and New South Wales confirms a concerning trend of cost shifting to councils that we are seeing right across the country.” 

Cr Scott said that a key consideration for the inquiry would be the importance and effectiveness of untied federal funding to councils through federal Financial Assistance Grants.

“Over the past 30 years, we have seen Financial Assistance Grants to councils slip from one percent of Federal taxation revenue to just half a percent,” Cr Scott said.

“Regional and rural councils have been hit the hardest, and for many of these councils Financial Assistance Grants make up more than 20 per cent of their annual operating expenditure.

“We are committed to partnering with the Federal, State and Territory Governments, to facilitate more affordable housing, better prepare for natural disasters, and deliver on our national emissions targets, but we can’t do this without funding support.”

Cr Scott said that it was also encouraging to see the terms of reference for the inquiry include workforce challenges, with ALGA’s research showing nine out of every ten councils are experiencing jobs and skills shortages.

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