Autopsy of municipal failure: The case of central darling shire

Local government plays a vital role in providing infrastructure, services and employment to rural and regional communities. Indeed, threats to the fiscal viability of regional councils may well jeopardise the sustainability of an entire community. In December 2013 the New South Wales (NSW) Minister for Local Government suspended Central Darling Shire (in far-western NSW) and appointed an interim Administrator in response to an unprecedented liquidity crisis. In October 2014 a public inquiry recommended extension of the period of administration until September 2020. This paper considers the processes leading up to this extraordinarily lengthy period of financial administration. In particular, we examine the claim that an inequitable allocation of Financial Assistance Grants (FAGs) was a major factor in bringing about the Shire's liquidity crisis. We conclude our analysis with some recommendations for changes to FAG allocations which will help ensure sustainable futures for rural communities.