An Analysis of the Relative Efficiency of Wastewater Utilities in Non-Metropolitan New South Wales and Victoria

Abstract

A recent policy issue in Australian local government has centred on a so-called 'skills shortage' in the sector, particularly in regional jurisdictions. In this paper, we estimate the relative efficiency of non-metropolitan water utilities in New South and Victoria and consider the role of divergent governance structures in order to measure the impact of unique managerial factors upon relative efficiency in wastewater service delivery. We find that larger utilities, governed by skills based boards, are relatively more technically efficient than those operating as a business unit of local government. We argue that this is partly explained by the ability of those utilities to attract and retain relatively more skilled staff. A number of policy recommendations are advanced.