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Bass Coast’s Financial Challenges Shared By Councils Across AustraliaCouncils across Australia are entering a period of financial crisis unless some dramatic reforms are introduced by state and federal governments. By Bass Coast Shire Council - 27th April 2007 - Back to News The findings come as part of a PricewaterhouseCoopers report commissioned by the Australian Local Government Association on the financial sustainability of local government.
"Councils across Australia are facing the same challenges and pressures that we are experiencing here at Bass Coast," said Bass Coast Shire Council’s Corporate Services Director, Danny Luna.
"Revenue available to councils is simply not keeping pace with the cost of providing services that are expected by the Australian community today.
"There are many councils that continue to post operating deficits because they can not fund the expectations of today’s community."
Compounding this financial dilemma for councils is the ever-widening infrastructure renewal gap.
"Councils are responsible for vast majority of public roads, drains, footpaths, toilets, buildings and facilities," Mr Luna said.
"A lot of this infrastructure was constructed more than 50 years ago and needs to be replaced.
"Councils, including Bass Coast, can only afford to replace a fraction of this infrastructure each year and unfortunately this not enough to cover the replacements needs," Mr Luna said.
The report estimates that $14.5 billion is needed to adequately renew existing infrastructure across Australia.
Government cost shifting is identified as the third major cause to the looming financial crisis for local councils.
"Cost shifting occurs in two forms," Mr Luna said.
"The first is when local government agrees to provide a service on behalf of the State or Federal Government. At the outset this is fine because the other level of government is also funding the service.
"However, experience has shown that the amount of funding has not kept pace with the cost of service delivery and in some cases funding has ceased all together. Local councils are left to not only provide the service but also pay for it.
"The second form of cost shifting is when the State or Federal Government ceases to provide a service and local government, being at the heart of the community and seeing that there is a genuine need for the service, steps in for the sake of their local community."
The report makes recommendations for reform in a ‘twin track’ approach. The first approach is for local government to continue its pursuit for internal efficiencies. The second approach is to seek changes to government funding arrangements.
Mr Luna says the proposed reforms are well supported by Bass Coast Shire Council.
"At Bass Coast, we are very committed to the model of Business Excellence which is driving our continuous improvement program," Mr Luna said.
"This program is producing internal efficiencies that help to reduce the cost of services.
"Bass Coast is also committed to strengthening the accountability of the State and Federal governments for services to our community.
"Councillors and senior staff will aim to drive this message home to members of our Parliaments," Mr Luna finished.
Source: www.gippsland.com Published by: news@gippsland.com
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