Tag Archives: finance

267 – Professor Joseph Drew – Analysis of Financial Results

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880 words (10 minutes reading time) by Lancing Farrell

The mean and median of the data set for all NSW councils

Professor Joseph Drew has posted another enlightening video on his YouTube channel. His analysis of 15 years of council data in NSW shows worrying increases in expenditure on staff, materials and depreciation. In fact, ‘worrying’ is an understatement. The situation is becoming catastrophic. Yet, no one seems overly worried in the Premier State.

Professor Drew has committed to producing the same data for Victoria. Maybe there will be more of a response from the Garden State. As every gardener knows, you have to observe what is happening and make timely interventions for a garden to succeed.

One of the challenges Professor Drew’s video has highlighted for me is the relatively low level of executive financial literacy and knowledge of statistics and data. This might explain the lack of response to the data from local government. Professor Drew goes to great lengths to explain the importance of measures of central tendency and the difference between the available measures. In particular, he is looking at the mean and standard deviations of the data set, and the median .

Are you digging out an old text book or searching on Google yet?

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261 – Reinventing Local Government

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600 words (7 minutes reading time) by Lancing Farrell

I recently acquired a ‘new’ copy of the 1992 book ‘Reinventing Government – How the Entrepreneurial Spirit is Transforming the Public Sector‘ by David Osborne and Ted Gaebler, a work that wielded significant influence globally in its time.

The impact of Osborne and Gaebler on world leaders can be discerned through the timing of policy changes, public declarations, and the alignment of advocated principles with the reform initiatives undertaken by these leaders. Some explicitly referenced the book in speeches, policy documents, or interviews, revealing its profound effect on their perspectives. In other instances, reforms closely mirroring the book’s principles suggest a potential influence. The book’s impact must be viewed within the broader context of prevailing ideas and reforms during that period.

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239 – Zombie councils

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500 words (5 minutes reading time) by Tim Whistler

I have read Lancing and Colin’s posts with some interest. As a long-term, self-appointed local government pundit, I don’t think the rate cap can be an existential threat to local government, but it is going to turn councils into zombies. Like zombie companies, councils will become dependent on others for their survival. They will be alive but unable to think or act for themselves. Despite what people would like to think, ultimately, they will be simply the local branch of the state government delivering the services the state decides they must. This is at odds with what many councils currently think they are doing.

“Councils have autonomy to provide services that meet the needs of their local community, and will establish a range of discretionary processes, including local laws, to guide certain activities that can occur within their municipality.”

Municipal Association of Victoria, ‘Vic Councils’ website
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238 – Il comune povero- ‘The poor municipality’

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1600 words (15 minutes reading time) by Colin Weatherby                                                                                                                

Great post by Lancing Farrell. I like the link to the creative and enduring solutions people have devised in response to food scarcity. Human ingenuity can be a marvellous thing.

The impact of declining financial sustainability on asset management is disturbing. As anyone directly responsible for council assets knows, for many years the biggest challenge for local government in Victoria has been the cost of caring for assets. The Institute of Public Works Engineers (IPWEA) has been advocating for better asset management for years. I would argue that the principal council service is to own and care for assets on behalf of the ‘community. The rate cap has rapidly made this much more difficult, and as Lancing showed, the challenge is not spread evenly across councils.

What can councils do in response to funding scarcity? Will our commitment and creativity help us find new ways to provide the services the community needs and expects? Our own il comune povero.

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237 Di necessità virtù – ‘Need gives rise to virtue.’

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1500 words (14 minutes reading time) By Lancing Farrell                                                                                     

I was reading an article about la cucina povera, the cuisine created in Italy over centuries based on the food prepared by poor and sometimes starving people. Throughout history, people have experienced food insecurity and famine and they have adapted, but none have done it as well as the Italians.  In Italy, love, ingenuity and scarcity combined to give birth to a new and delicious cuisine that has become mainstream.

I wondered, can a similar thing happen to local government as it is starved of funds and impoverished by the Victorian government’s rate cap?

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232 – Coronavirus and local government – Financial Impact

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1400 words  (reading time 11 minutes)                                                          by Lancing Farrell

Coronavirus financial impact

The focus of local governments has been on employee protection, service continuity, managing disruptions to cash flow and supply chains, and trying to understand the new risks emerging with Coronavirus. It is a whole new operating environment. This post explores some of the financial and operational impacts of the Coronavirus.

Physical distancing has reduced the capacity of facilities by half or more, making appointments and providing concierges has increased staffing requirements at facilities, and there is demand to retain new services like ‘click and collect’ and tele-services introduced in response to the Coronavirus, at the same time as regular services resume.

This is all happening as revenue is impacted by loss of fees and charges, additional expenses in relief packages offered to businesses, and citizens seeking deferral of rates because of financial hardship. Some councils are planning not to index their rates, which is a revenue reduction next financial year and every year thereafter.

At the same time, councils in Victoria are expected to maintain the employment of all staff without financial support from the Federal or State government. Councils adding to unemployment will not help and they need to work out how to live within their means.

What have councils been doing and what do they need to consider doing? Continue reading →