Local governments face their financial future as 'patterns of dysfunction' emerge - ABC Local

When polling booths close at local government elections across New South Wales, not everyone in the state will have had their say.

Key points:

• A local government expert says six councils are "on the brink" of going into financial administration
• The COVID pandemic has exacerbated already struggling council finances
• The LGNSW president calls for the return of federal assistance grants to 1 per cent of Commonwealth GDP

Cobar, Narromine, Bourke, and part of Warren in the state's west failed to get enough candidates to warrant elections while the Central Coast, Balranald, Wingecarribee, and Central Darling local government areas are all under administration. 

And, according to Professor Joseph Drew from the UTS Institute for Public Policy and Governance, at least six other councils are teetering on the edge of a fiscal cliff.

"I don't think a lot of local governments even realise how dire the situation is," he said.

"There are at least half a dozen local governments that if I was to turn on the computer tomorrow morning and find out they were in financial administration I wouldn't be surprised at all."

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Dysfunctional patterns

Viv May brings half a century of local government experience to his role as interim administrator at Wingecarribee Shire Council.

After cleaning up a fourth council, he said a pattern of dysfunction was starting to emerge.

"The general manager is the glue to making a successful council and when they blur their roles and allow councillors to go into operational areas, it's a recipe for disaster," Mr May said.

LGNSW president Linda Scott says local government revenue was hit hard by the economic downturn caused by COVID-19.(AAP: Joel Carrett)

As COVID hit the bottom lines of governments around the world, regional councils have found themselves at an added disadvantage with limited sources of revenue.

"For a council like Mosman, if they lost their financial assistance grants tomorrow, they could simply put up the car parking charges at Balmoral and get the same resources," Mr May said.

"Country councils, and even a council like Wingecarribee where I am now, just can't do that."

City of Sydney councillor, Linda Scott, as president of LGNSW, the state's peak local governance advocacy body, has advocated for the return of federal assistance grants to 1 per cent of Commonwealth GDP.

"COVID has hit local governments very hard. My own council, the City of Sydney, lost $75 million in six months," Cr Scott said.

"New South Wales local government systems is one of the few in Australia that continues to have rates capped.

"Untied, recurrent funding from the Commonwealth government is so crucial to the future of local governments' financial security."

COVID-19 impact

Local government elections have been delayed twice in New South Wales due to COVID-19.

Professor Drew was concerned that also meant a delay in communities and councillors understanding their financial challenges.

"An extension [granted by the state government] for councils to put in their audited financial statements, and a lot of local governments have put off special rate variations that would have been put in at the end of this November," he said.

Local government expert Professor Joseph Drew says there are at least half a dozen councils in NSW "on the brink" of financial collapse(ABC New England: Jennifer Ingall)

"We have candidates running for this local election who don't know the financial situation of the council and we have all the voters who also don't know the financial situation of their council."

Time will tell how badly COVID has impacted council finances and at least by Saturday night it will be clear who will be taking responsibility for them.

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Local governments face their financial future as 'patterns of dysfunction' emerge - ABC Local
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