350 words (3 minutes reading time) by Colin Weatherby
Professor Joseph Drew has produced his annual analysis of local government expenditure in NSW. He has also looked at the reasons for the latest large rate increases being sought by councils. Professor Drew gives his usual clear and calm description of the findings.
I think his videos have become an elegy for local government.
Continue reading1200 words (13 minutes reading time) by Colin Weatherby
A research article in the Australian Journal of Public Administration, titled ‘The other side of the local government ledger — The association between revenue growth and population growth,’ raises a crucial red flag for all councils currently grappling with population growth. The study, by Professor Joseph Drew and his colleagues, sheds light on the relationship between population growth and local government revenue. Professor Drew has made a video explaining the findings of the paper.
In local government, you hear a lot of talk about the rate cap, a limitation on property taxation imposed by the State government on councils, and the impact it is having on councils’ ability to fund services. I have posted previously on what I think councils should be doing in response to the spending gap arising from the rate cap. Most discussion in the sector has focused on the impact on expenditure.
Professor Joseph Drew and his colleagues are suggesting it is equally important, perhaps more important, to understand the impact on unit revenue. Unit revenue, representing the per capita revenue generated by a council, becomes pivotal when service demand stems from individuals residing in the municipality rather than the properties they occupy. The potential mismatch between service consumption drivers and revenue generators poses a substantial financial sustainability risk.
Continue reading1400 words (reading time 11 minutes) by Lancing Farrell
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
Local Government Utopia 