Local government funding and financing

The Productivity Commission's draft report on local government funding and financing is now available.

The Government asked the Productivity Commission to identify whether the existing funding and financing arrangements are suitable for enabling local authorities to meet current and future cost pressures.

We found that the current funding and financing framework measures up well against the principles of a good system. The current system, based on rating properties, is simple and economically efficient, compared to alternatives. The current system should therefore remain as the foundation of a fit-for-purpose future funding and financing system for local government.

However, councils need new tools to help them deal with some specific cost pressures. New funding tools are required in four areas:

  1. Supplying enough infrastructure to support rapid urban growth;
  2. Adapting to climate change;
  3. Coping with the growth of tourism; and
  4. The accumulation of responsibilities placed on local government by central government.

There is also significant scope for councils to make better use of existing funding, and improve their organisational performance, productivity and decision making.

The draft report makes 67 findings, 30 recommendations and asks eight questions. Testing the ideas and recommendations in this report is an important next step in our inquiry. We invite you to review the draft report and share your feedback. Submissions are invited by 29 August 2019. Make a submission here.

Please see the 'Downloads' section below for useful documents on the inquiry, including an At a glance summary, A3 briefing, media release and commissioned expert reports.

Inquiry timeline

4 July 2019                      Draft report released
29 August 2019               Submissions on draft report close
30 November 2019         Final report released