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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

third tier of government « Previous | |Next »
February 6, 2006

We know that more services are being increasingly being dumped on local councils by state governemtns without adequate funding from the state or commonwealth. So how are they coping.? We see the infrastructure being run down, we read about them being captured by developers, we experience constant rate increases and we suspect they are not coping very well.

Ross Gittins in the Sydney Morning Herald makes sense of what we observe with local councils in tersm of the way they conduct their finances. He says:

The councils are in chronic operating deficit but are avoiding borrowing to cover those deficits. Rather, the deficits are being funded largely by running surpluses on their capital accounts.This means capital grants, capital contributions and the proceeds of asset sales are used mainly to prop up operating costs rather than to finance capital renewals and enhancements.

Gittins says the implication is that:
...councils are failing to raise sufficient revenue to cover their expenses but are concealing the deficiency by running down the quality of public infrastructure. One way or another, part of the funding of services consumed by current ratepayers is being shifted on to future ratepayers.(The "infrastructure" we're talking about, by the way, includes local roads, bridges, kerbing, paths, traffic facilities, stormwater drains, plant and equipment, buildings, parks, libraries, swimming pools, etc.)

The inference is an emerging infrastructure crisis. So the way local councils are currently financed needs to be addressed.

That is not on the policy agenda is it? There are sounds of silence when local government raises the funding issue.

| Posted by Gary Sauer-Thompson at 8:58 AM | | Comments (6)


Our tax system is screwed. Each level of government above pilfers tax revenue from the one below. There is a vertical fiscal imbalance that needs to be rectified.

This seems to be the theme of the time. Why pay for it now, just let the costs be borne by our descendants.

How will history judge the last 50 years and the coming 50?

I don't think we are going to be talked about in glowing terms.

You have a problem with the spelling of Ross Gittins' name. So do my students.
Good point on substance though. If the infrastructure isn't owned by private concerns then it's irrelevant. The more decay the better.
Also good cartoon on the previous post. Plainly stated hypcrisy. The 'America love it or leave it' has been a longtime catchcry of the war-makers.

my eye sight is fading. I left my reading glasses at home. I've corrected the mistake.

The decay in infrastructure is particularly noticeable in SA with respect to arterial regional roads. These are in a terrible state compared to Tasmania and they cause many deaths due to head on crashes.


The poor infrastructure is really noticeable in the seachange coastal regions. Local government is really stetched and cannot cope with the rising demand.

The state utilities (eg., water) and Telstra are very slow in modernizing the sewerage plants or telecommunications.

I suspect that governance neo-liberal style is premised on exclusion. Some regions can go the way of old mining towns--just die a slow death.

The solution , says Peter Costello, is to shift and go to the good places.

Big Bob,
I thought that things were better in Tasmania than in South Australia--judging from my weeks holiday in the former.

It is SA not Tasmania that is need of big federal handouts. Tasmania has reinvented itself through tourism.