Smoke and Mirrors: Fallacies in the NSW Government's Views on Local Government Financial Capacity

Abstract

Under its “Fit for the Future” program, the Australian NSW Office of Local Government (OLG, 2014) requires local councils to demonstrate that they are adopting a local council structure that has scale, strategic capacity and is financially sustainable. This paper addresses the relationship between scale (population) and financial sustainability.In “Fit for the Future,” the Government defines a financially sustainable council as “one that, over the long term, is able to generate sufficient funds to provide the level and scope of service agreed with its community through the Integrated Planning and Reporting process”. However the Government has pre‐empted rational and informed analysis of the efficient financial scale of local councils with its arguments that councils are currently running financial deficits of $1 million a day and that this can be rectified only by councils adopting a scale of organisation in the order of 250,000 persons per mega council as asserted and recommended by the Independent Local Government Review Panel (ILGRP, 2013).