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Bibliography, Acronyms and Glossary


Aboriginal and Torres Strait Islander Commission 2002, Outcome data measurement; Unfinished business: Evaluation of data for outcome measurement for selected Indigenous service delivery programs, Commonwealth of Australia, Canberra.

Auditor General of Victoria 2002, Management of roads by Local Government, Victorian Government, Melbourne.

Australia 2002, Budget speech and papers 2002-03, Commonwealth of Australia, Canberra.

Australian Bureau of Statistics 2001 (March), Wage and salary earners, Australia, cat. no. 6248.0, ABS, Canberra.

- 2001 (September), Australian demographic statistics, March quarter 2001, cat. no. 3101.0, ABS, Canberra.
- 2002, Aboriginal and Torres Strait Islander Australians: A statisiticalstatistical profile from the 2001 Census, ABS, Canberra.
- 2002 (December), Australian national accounts: National income, expenditure and product, cat. no. 5206.0, ABS, Canberra.
- 2002 (June), Census of population and housing: selected social and housing characteristics, Australia 2001, cat. no. 2015.0, ABS, Canberra.
- 2002 (October), Environment expenditure, Local Government Australia, cat. no. 4611.0, ABS, Canberra.
- 2002 (April), Government finance statistics, Australia, 2000-01, cat. no. 5512.0, ABS, Canberra.
- 2002 (May), Housing and infrastructure in Aboriginal and Torres Strait Islander communities 2001, cat. no. 4710.0, ABS, Canberra.
- 2002 (April), Taxation revenue Australia, 2000-01, cat. no. 5506.0, ABS, Canberra.
- 2002, Year book Australia 2002, ABS, Canberra.
- 2002 (November), 2001 Census: basic community profile and snapshot, ABS, Canberra.

Australian Classification of Local Governments Steering Committee 1994, Australian classification of Local Governments, Australian Government Publishing Service, Canberra.

Bureau of Transport Economics 1987, Assessment of the Australian road system, no. 61, BTE, Canberra.

- 2000, Rural roads: the economic perspective, by Mark Harvey, BTE, Canberra.
- 2001, Spending on local roads, working paper 44, BTE, Canberra.

Bureau of Transport and Regional Economics 2002, Benefits of flood mitigation, report 106, BTRE, Canberra.

Commonwealth Grants Commission 2001, Review of the operation of the Local Government (Financial Assistance) Act 1995, Commonwealth of Australia, Canberra.

- 2001, Working papers for review of the operation of the Local Government (Financial Assistance) Act 1995, Commonwealth of Australia, Canberra.
- 2001, Report on State revenue sharing relativities, 2001 update, Commonwealth of Australia, Canberra.

Department of Finance and Administration 2002, Final Budget outcome 2001-02, Commonwealth of Australia, Canberra.

Department of Infrastructure (Victoria) 2000, Facing the renewal challenge; Victorian Local Government infrastructure study, Victorian Government, Melbourne.

- 2002, Annual community satisfaction survey 2002, Victorian Government, Melbourne.

Department of Local Government (NSW) 2002, Comparative information on NSW Local Government councils 2000-01, DLG, Sydney.

Department of Local Government and Planning (Queensland) 2002, Queensland Local Government: Comparative information, Local Government Services, Brisbane.

Department of Transport and Regional Services 2002, National report on Local Government 2000-01, Department of Transport and Regional Services, Canberra.

- 2001, Commonwealth assistance for local projects 2000-01 - A directory for local government and its communities, Commonwealth of Australia, Canberra.
- 2001, The rural book; the handbook of major Commonwealth government services and programmes for regional and rural Australia, Commonwealth of Australia, Canberra.
- 2002, Annual report 2001-02, Commonwealth of Australia, Canberra.
- 2002, Leading practice; national awards for Local Government 2002, Commonwealth of Australia, Canberra.
- 2002, Submission to Inquiry into Local Government by the House of Representatives Standing Committee on Economics, Finance and Public Administration, Department of Transport and Regional Services, Canberra.

Independent Committee of Inquiry into the Distribution of Federal Roads Grants 1986, Report of the Inquiry into the Distribution of Federal Roads Grants, Commonwealth of Australia, Canberra.

Industry Commission 1997, Performance measures for councils: Improving Local Government performance indicators, Australian Government Publishing Service, Canberra.

Local Government Metropolitan Chief Executive Officers' Association 2001, A wealth of opportunities: A report on the potential from infrastructure management in South Australian Local Government, Local Government Infrastructure Management Group, Adelaide.

Municipal Association of Victoria 2001, Municipal asset management review, MAV, Melbourne.

Sproats, K 1996, Comparisons of agendas and processes in Australian Local Government, paper presented to the Local Government on Queensland Centenary Conference, August.

Western Australian Local Government Association, 2002, Local Government road assets and expenditure report 2000-01, WALGA, Perth.

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Acronyms and initialisms

ABS Australian Bureau of Statistics
ACLG Australian Classification of Local Government
CGC Commonwealth Grants Commission
COAG Council of Australian Governments
DOTARS Department of Transport and Regional Services
GST goods and services tax
LGMA Local Government Managers Australia
LOGJOG Local Government Joint Officers Group
POG Planning Officials Group
SPP Specific Purpose Payment

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the Act

For the purposes of this National Report, the Act refers to the Local Government (Financial Assistance) Act 1995.

balanced budget approach

A method of general purpose grant assessment whereby gross expenditure needs and revenue capacity for each Council are assessed with the difference between the expenditure and revenue assessments being the equalisation need.


The practice of measuring an organisation's performance and practices in key areas and comparing them with other organisations, to find ways of achieving better results.

best practice

The achievement of best practice refers to the way in which leading-edge organisations are able to manage and organise their operations to deliver world-class standards of performance in areas such as cost, quality and timeliness.


Capping, for the purposes of this report, is the stabilising of component factors to bring a Council's grant to within a set range of that Council's grant in a previous year.

Commonwealth Grants Commission

A statutory authority established by the Commonwealth Grants Commission Act 1973 whose main task is to recommend to the Commonwealth Government, for consideration by the Ministerial Council for Commonwealth-State Financial Relations, the shares for each State and Territory of the pool of general revenue and funding grants made available by the Commonwealth.

Competition Principles Agreement (CPA)

The agreement between the Commonwealth and State and Territory Governments that establishes agreed principles on structural reform of public monopolies, competitive neutrality between public and private sectors, prices oversight of utilities and other corporations with significant monopoly power, a regime to provide access to essential facilities and a programme of review of legislation restricting competition. It is one of three intergovernmental agreements (the other two are Conduct Code Agreement and Agreement to Implement the National Competition Policy and Related Reforms) negotiated under the Council of Australian Governments' forum of April 1995.

competitive neutrality

Competitive neutrality seeks to ensure that competition between public and private businesses happens on a fair basis by making sure they face the same taxes, incentives and regulations.

direct assessment approach

A method of grant assessment whereby a positive or negative assessment of expenditure need or revenue capacity is made for each Council relative to a standard assessment. The sum of positive and negative assessments is the equalisation need.

disability factor

A measure of underlying influences that would lead a Council to spend more (or less) per capita than the State average, expressed as an adjusting ratio of the State average.

effort neutral or neutrality

The assessment of a financial assistance grant is effort neutral when it neither rewards nor penalises a Council where expenditure or revenue-raising patterns vary from the State average because of policy differences, differences in efficiency or levels of self help.

escalation factor

The ratio by which the level of financial assistance grant nationally is adjusted, and which the Treasurer determines according to the requirements of the Act.

estimated factor

This is the escalation factor, as determined by the Treasurer at the start of the financial year, to determine the levels of grant payments, according to the requirements of the Act which will be paid to Local Government for that year.

final factor

This is the escalation factor, as determined by the Treasurer at the end of the financial year, according to the requirements of the Act. It will determine the final entitlement payable for Local Government financial assistance for that year. Determination of the final factor will (usually) require adjustments to be made to the actual payments, which were based on the estimated factor at the beginning of the year.

financial assistance grants

These are 'untied' funds (not tied to a specific purpose) the Commonwealth grants to Local Governments under the Act through the State governments.
Financial assistance grants to Local Government are supplied to States as 'tied' (for a specific purpose) but once distributed to Local Government are 'untied'. They comprise two components: 'general purpose' and 'local roads'.

full horizontal equalisation

Distribution of general purpose grants to Local Government, with the objective of ensuring each Council is able to function, by reasonable effort, at a standard not lower than the average standard in the State and takes account of differences in expenditure required in performing its functions and in the capacity to raise revenue (s6.3(a) and (b) Local Government (Financial Assistance) Act 1995).

general purpose grant

This is one of two components (the local roads grant being the other) of the financial assistance grants to Local Government. The objective is to strengthen Local Government by addressing the vertical fiscal imbalance caused by Local Government's narrow tax base. General purpose grants promote equity between Councils and certainty of funding. They are distributed between States on a per capita basis and within States on a horizontal equalisation basis in accordance with the National Principles.

GFS net worth

GFS net worth reflects the contribution of governments to the wealth of Australia, being a summary of the value of assets, shares and other contributed capital less liabilities.

inclusion approach

The inclusion, in calculating a Council's general purpose grant, of all assessed expenditure and grants, including that related to Commonwealth and State specific purpose funding.

isolation allowance

Isolation allowance is calculated using a regression analysis model based on the additional costs of isolation and distances from capital cities. An additional component to the isolation allowance is included which specifically recognises the additional industrial relations obligations of Councils in western New South Wales.

Local Government Grants Commissions (LGGC)

In each State and the Northern Territory, Local Government Grants Commissions have been established under State and Territory law/legislation. Their primary role is to make recommendations to the State or Territory minister on distributing available financial assistance grants to Councils in that State or Territory.

local roads grant

This is one of two components (the other being the general purpose grant) of the financial assistance grant to Local Government. It was formerly provided as a tied grant and became 'untied' from 1 July 1991. It continues to be identified and distributed according to the former tied grant arrangements. It is distributed between States on the basis of historical shares and within States on the basis of road expenditure needs.

minimum grant entitlement

Every Council is entitled to receive a minimum grant which is not less than the amount it would receive if 30 per cent of the available general purpose grant for that State were distributed on a per capita basis.

national competition policy (NCP)

A series of reforms to encourage competition and discourage anti-competitive behaviour, set out in three intergovernmental agreements (the Competition Principles Agreement, the Conduct Code Agreement and Agreement to Implement the Competition Policy and Related Reforms), which emanated from the Report of the Independent National Competition Policy Review Committee (Hilmer Report).

negative allowances

Allowances which equalise the financial capacity of 'advantaged' Councils to that of the average level for that State, by accordingly reducing the level of the financial assistance grant. Councils assessed as being 'advantaged' may, for example, enjoy high values per property.

Operational subsidy

Grant provided to Councils that do not have access to significant other revenue such as that from rates.

positive allowances

Allowances which equalise the financial capacity of 'disadvantaged' Councils to that of the average level for that State, by accordingly increasing the level of the financial assistance grant. Councils assessed as being 'disadvantaged' may, for example, suffer low values per property.

public trading enterprise (PTE)

Public trading enterprises are resident public enterprises, such as Telstra or Australia Post, mainly engaged in producing goods and services for sale in the market place at prices which aimto recover most of the costs involved.

Rate capacity

A measure of a Council's capacity to raise revenue from rateable property, having regard to activities on that property, such as agriculture or mining.

Rate pegging

Action by State governments to limit any variation in rates levied by Councils, usually by ceiling or allowable limit on the percentage increase from year to year.

revenue allowances

Revenue allowances compensate Councils for their relative lack of revenue-raising capacity. Property values are the basis for assessing revenue-raising capacity because rates, based on property values, are the principal source of Councils' income. Property values, to some extent, are an indicator of the relative economic wealth of local areas.

specific purpose grant

Payments made by Commonwealth or State or Territory governments to a Council for a specific purpose. Such grants usually require a Council to meet certain conditional arrangements.

standardised revenue and expenditure

The assessed (as distinct from actual) revenue and expenditure for each Council, determined by its Local Government Grants Commission as required for horizontal equalisation purposes, which takes into account each Council's expenditure needs, revenue-raising capacity and disabilities.

structural reform

A change to the external relationships between Councils including boundary changes and amalgamation of Councils, cooperative service provision, major resource sharing initiatives and joint service delivery.


Reflect the significance of the measure in terms of the expected additional cost. The weightings have generally been determined by establishing a factor for the maximum disability based on a sample of Councils or through discussion with appropriate organisations.

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