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Key Strategies

Key strategy Performance indicators Achievement
Ensure the Commonwealth assists in providing efficient and effective local government by reviewing the current local government financial assistance policies.
(Contributing division: Territories and Local Government)
Governments and community bodies endorsing future local government financial assistance arrangements. Partially achieved

Key achievements

The overriding aim in the implementation of this strategy is to ensure an equitable distribution of local government financial assistance grants between councils within a state.

Review of the Local Government Act

In June 2001, the Commonwealth Grants Commission provided a report on its review of the Local Government (Financial Assistance) Act 1995. This Act required that the review be completed by June 2001. The review found that, in broad terms, the government's intentions in providing financial assistance to local government were being achieved. The government has not yet responded to the review.

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Inquiry into local government finance

The House of Representatives Standing Committee on Economics, Finance and Public Administration is conducting an inquiry into local government and cost shifting. The inquiry is examining local government finance. One of the terms of reference for this inquiry is to examine the findings of the Commonwealth Grants Commission review taking into account the views of interested parties.

The department prepared a detailed submission to the inquiry in July 2002 and, at the request of the Minister for Territories, Local Government and Regional Services, it was circulated to all local councils in Australia. The submission contained a comprehensive analysis of local government financial issues. Subsequently, the department has provided a further five submissions to the inquiry.

The inquiry released a discussion paper in February 2003 providing some options for improving Commonwealth-local government financial relations.

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Annual reporting on grants

Following a review in 1994 of the Local Government (Financial Assistance) Act 1986, the Commonwealth enacted the Local Government (Financial Assistance) Act 1995. The 1995 Act requires that the minister report to parliament 'as soon as practicable' after 30 June each year on the operation of the Act. A copy of this report can be found at www.nolg.gov.au/publications

The annual report produced under the Act reports on the performance of local governing bodies and helps to assess whether two of the purposes of the Act are being achieved. These purposes are:

  • to increase transparency and accountability of the states in the allocation of the Commonwealth's grants to local governing bodies
  • to promote consistency in the methods by which grants are allocated to achieve equitable levels of services by local governing bodies.

The annual report on the 2001-02 grants of $1.4 billion was tabled in on 26 March 2003 in line with the requirements under the Local Government (Financial Assistance) Act 1995.

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