Local government in South Australia manages its finances conservatively under extreme constraints. It has access to one tax, Council rates, has very low debt and receives an unfair share of State and Federal government funding.
In general terms the Inquiry found that Councils were putting community needs and demands for services ahead of their own financial sustainability and that this could not continue. The Inquiry also found that Councils had very low net debt but extraordinarily large amounts of community infrastructure (almost $10 billion in total at the time of the Inquiry) which was slowly decaying without the level of maintenance and renewal funding it deserved. It also found that South Australia Councils were not getting a fair share of Commonwealth funding for Local Government and that the South Australia Government provided the lowest per capita funding to Councils of any mainland State or Territory government.
Following the Inquiry, and with LGA support, the South Australian Parliament made changes to the financial management provisions of the Local Government Act 1999. The changes were in accordance with key recommendations of the Inquiry and support the LGA's work in this area. Key changes to the Act mean that now:
Financial management practices continue to evolve and reform both directly and indirectly, in Local Government. Recent and current changes and issues include: