Abstract
Local government in Australia accounts for only nine percent of domestic public expenditure, and has no responsibility for financing education, welfare, or public safety. Local expenditures in metropolitan areas vary widely, but city-suburban fiscal disparities are nonexistent. Multiple regression analysis is used to identify key determinants of local spending in the Sydney and Melbourne metropolitan areas. The Australian system of delivering public services to urban areas is examined in the context of its fiscal structure which, compared with the American structure, assigns a large role to state government and a minor role to local authorities.
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