Download Local Government in Australia

Local Government in
Australia during a global
economic downturn
Cr Geoff Lake
President
Australian Local Government Association
Outline of Presentation
1. Local Government in Australia
2.
The impact of the global financial crisis
(GFC) in Australia
3.
Implications of the GFC for Local
Government in Australia and what we are
doing in response
Local Government in Australia
• 565 councils
• A creation of state governments
• 2% of GDP (annual expenditure of $25 billion)
• Employs 170,000+ staff
• Very diverse in terms of population and area
– Population ranges from 1 million to less than 200
people
– Area from 2.5 sq km to 378,000 sq km (size of
Japan)
Local Government Finances and Activities
Local Government revenue sources:
• Property rates
• Fess and charges
• Grants from other governments
• Interest
• Other
38%
31%
13%
4%
14%
Local Government expenditure:
• Transport (incl roads)
• Housing and community amenity
• General Public services
• Recreation and culture
• Education, health and welfare
• Other Economic affairs
• Public order and safety
• Other
25%
24%
15%
15%
8%
4%
2%
7%
Australian Local Government
Association (ALGA)
• Voice of local government at the national level
• Influences policy development at the national
level
• Member of Council of Australian Governments
and 13 Ministerial Councils
• A vehicle for consolidated national effort
across all Australian councils
Impact of the Global Financial Crisis
National level
• Banking sector relatively strong
• Global credit squeeze impact
• Australia is a trading nation and exports
have suffered
• Economy expected to contract by 1.4%
in 2008-09
• Stimulus packages
– October 2008 $10.4b Economic Security
Strategy
– February 2009 $42b Nation Building and Jobs
Plan
Impact of the Global Financial Crisis
Local Government
• Beneficiary of economic stimulus
• Impact on rates and services
• Local Government investments
• Local Government Superannuation Funds
• Borrowing and the credit squeeze
What Australian Local Government is
doing in response to the GFC
• Increasing spending on local infrastructure
• Positioning to receive further stimulus
money from the Australian Government
• Maintaining (or expanding) local services
• Strengthening local government’s
institutional place in Australia’s threetiered system of government
• Revisiting where our collective efforts are
focused
External funding provided to
local government
Federal Govt
$2.5 billion
(68%)
State Govts
$1.2 billion
(32%)
Local government expenditure on
influencing government
State/territory level
($65m)
National level
($2.25m)
Final Word
• Unprecedented opportunity for local
government in Australia at the NATIONAL
level
• Increasing role for LG and Australian
Government  decreasing role for state
governments
• New relationship between Australian
Government and LG
• BUT, some challenges – e.g. community
perceptions and councillor performance