Jump to Content


The Local Government (Financial Assistance) Act 1995 requires that the Minister report to Parliament on the operation of the Act 'as soon as practicable' after 30 June each year.

This annual report to Parliament must include an assessment of:

  • the extent to which allocation of financial assistance grants has been made on a full horizontal equalisation basis
  • the methods local government grants commissions used in making their recommendations the performance by local governing bodies of their functions including:
    • their efficiency
    • services provided by them to Aboriginal and Torres Strait Islander communities.

Submitting an annual report to Parliament seeks to achieve two of the government's goals in relation to the arrangements under the Act. They are:

  • to increase States' transparency and accountability in allocating the Australian Government's grants to local governing bodies
  • to promote consistency in the methods by which grants are allocated to achieve equitable levels of services by local governing bodies.

Reporting on local governing bodies' performance helps to assess whether two of the Act's purposes are being achieved. These purposes are:

  • to improve the efficiency and effectiveness of local government
  • to improve the provision by local governing bodies of services to Aboriginal and Torres Strait Islander communities.

The report covers all local governing bodies in receipt of grants under the Act. It fosters transparency and accountability by enabling an interstate and an intrastate comparison of the allocation of grants to local governing bodies.

Chapter 1 provides a comprehensive overview of local governance in Australia, including its roles, functions, size and diversity, finances and governance arrangements.

Chapter 2 provides an overview of current arrangements, including the process and principles of apportioning funding between the States and between local governing bodies within a State. Appendix D sets out the financial outcomes for all local governing bodies in receipt of grants. The classification system used in Appendix D to group similar local governing bodies is described in Appendix F.

The National Principles for allocating general purpose and local road grants is at Appendix A, and the methodologies each State adopted in allocating funding to local governing bodies are summarised at Appendix B. Appendix C provides a comparison of the distribution models the States and Northern Territory Grants Commissions used. The grant outcomes for each council in 2003-04 is at Appendix D, while Appendix E shows the ranking of local governing bodies within a State on a relative needs basis.

Local government performance is discussed in Chapter 3, which reports on State developments, Australian Government activities to support local government performance improvement

and updates reforms and the application of the National Competition Policy. State reports on performance and reform are at Appendix G. Improved performance of local governing bodies continues to be promoted through the National Awards for Local Government. The 2004 Award winners are listed in Appendix I.

Chapter 4 addresses infrastructure issues and has a bearing on the efficiency and effectiveness aspects of local government performance.

A report on the delivery of local government services to Aboriginal and Torres Strait Islander people is in Chapter 5 and the reports from the States are at Appendix H. Also included in Appendix H are reports from the States (except for New South Wales) and the Northern Territory on access by discrete Indigenous communities to local government services.

This year Chapter 6 examines the issue of the ageing of the population and the likely impact this will have on local governments in the future. And Chapter 7 provides information on local government operation and performance in Germany.