Stronger local government revenues

Stronger local government revenues
26 February 2013

A new working paper from ACELG suggests how local government in Australia might independently improve revenue streams in the medium to long term.

Entitled In Our Hands: Strengthening Local Government Revenue for the 21st Century, the research distils recent findings on the topic and presents fresh thinking and sound evidence about how stronger local government revenues might be achieved to meet the ongoing and emerging needs of local communities.

Prepared by lead researcher, John Comrie, the report is written with a practitioner focus to assist councils and the sector as a whole, and covers a wide range of issues concerning property tax and other sources of revenue. A series of ‘next steps’ for the sector to consider is included.

Further background
It is unlikely that the local government sector collectively will realise significant additional financial support from other spheres of government in the foreseeable future. Some councils, often with large geographic areas and small population bases need additional financial support but in the main, local governments have a large degree of control over the level of services they provide (and therefore the costs they incur) and the revenue they generate.

Property taxes are generally an appropriate prime revenue source for local governments and so generating more rate revenue is likely to be both warranted and feasible for many councils. In order to do so they need to ensure that the structure of their rating strategy reasonably meets sound tax design criteria principles and the circumstances of their communities.

Legislative refinements and additional guidance would assist councils to make better rating decisions. Scope also exists for many councils to generate additional revenue from user charges for services they provide that are of primarily private good character.

The local government sector has made sound progress in improving financial performance in recent years but more needs to be done both by the sector itself and with other spheres of government to further strengthen the revenue raising and overall financial capabilities of local governments.

Further information about the ACELG Stronger Local Government Revenues project can be found here, including a background paper.

Contact: John Lavarack, ACELG Research Officer: [email protected], (02) 9514 2595.


Paper: In Our Hands: Strengthening Local Government Revenue for the 21st Century

Paper summary | Media Release (28 February)

« Back to News