Financial Sustainability and Financial Viability in Australian Local Government

Abstract

Sustainability has become an important ingredient in contemporary public policy. However, considerable ambiguity surrounds the precise meaning of sustainability in concrete policy contexts, such as financial sustainability in local government. Using recent Australian national and state public inquiries into fiscal sustainability in local government as an illustrative example, this paper considers the tensions that derive from the dual role of local government as local democratic institution and an efficient local service provider, and the difficulties involved in defining fiscal sustainability adequately. It is argued that the concept of sustainability cannot be meaningfully fully reduced to narrow accounting measures in local government. Financial sustainability would thus be more accurately described as financial viability in local government, with the term sustainability in local government employed to cover local action directed at global sustainability.