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An evaluation of amalgamation and financial viability in Australian local government

PFM, Vol. 13 No. 3, (2013)

Like numerous other local government systems in developed countries, Australian local government confronts daunting financial problems, perhaps most acutely evident in the emergence of a severe backlog in local infrastructure maintenance and renewal. Australian local government policy makers have relied to an unusual and extreme degree on compulsory council consolidation as the main policy instrument to tackle the financial crisis. This paper sets out the dimensions of the financial crisis and the attendant heavy reliance on forced amalgamation and then goes to consider the efficacy of compulsory council consolidation as a means of improving financial viability in Australian local government through the prism provided by eight national and state-based public inquiries into financial sustainability in local government over the past decade. With one exception, these inquiries are skeptical of the ability of forced amalgamation to improve local authority financial viability.

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