Introduction to 'Reshaping Australian Local Government: Finance, governance and reform'

Scholars have invested a vast amount of effort into the theoretical and empirical analysis of government in representative democracies. Despite this impressive literature, local government can nevertheless justly be described as the poor cousin of its more exalted state and federal relatives in terms of the attention it has drawn from the research community. At least three factors may explain the existence and persistence of this unfortunate state of affairs. In the first place, in many advanced economies expenditure by local government often comprises a relatively small proportion of total public sector outlays and thus it may have been construed as somewhat less deserving of scholarly inquiry than relatively larger provincial and central governments. This certainly appears to have been the case in Australia where around 730 municipalities outlay $13 billion, representing some five per cent of total government expenditure or about 1.6 per cent of gross domestic product (NOLG 2001) . Secondly, even when local government expenditure in absolute terms is high - and $13 billion can hardly be deemed negligible in the Australian context - the constitutional fact that local governments are typically statutory creatures of higher tiers of government generally implies that they are manipulated and constrained by state and federal governments. Most scholars of government have thus focused on these higher levels of governance in their attempts to account for the behavior of local governments. The constitutionally subordinate nature of local government in Australia is vividly illustrated by the fact although both the Commonwealth and state and territory governments are enshrined in the Australian Constitution, local government has no constitutional standing at all. Thus all local authorities in Australia derive their powers and functions exclusively from state and territory legislatures through state acts and regulations.