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Department of Premier and Cabinet

Local government financial relationships

Tasmania has developed a far-reaching and historic agreement to reform the financial relationship between State and Local Government. The Partnership Agreement on State and Local Government Financial Reform was developed through the Premier’s Local Government Council. It is the first financial reform agreement of this type between the two spheres of government anywhere in Australia. The State and Local Government Financial Reform Act 2003, which gave effect to this agreement, commenced on 1 July 2004.

A Public GuidelinePDF icon (PDF, 176KB) in relation to this legislation has been issued by the Department of Treasury and Finance.

Other information on the financial relationships between the three sectors of government can be found as follows:

The Tasmanian Audit Office annual report on Tasmanian Government Departments and Public Bodies includes a section on Local Government. This provides summary statements of the operating, financial position and cash flows of Councils, and a ratio analysis of selected financial indicators.

An outline of the financial relationships between the State and Commonwealth Governments and Local Government can be found in the National Report on Local Government.  This report includes an explanation of the methods used by State Grant Commissions in making funding recommendations.

In 2001 the Federal Government reviewed the operation of the Local Government (Financial Assistance) Act 1995, under which financial assistance is provided to Local Government. The review was undertaken by the Commonwealth Grants Commission and the final Report issued by the Commission can be found at the review website.


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