You don’t need to drive too far on a rural road in Australia to encounter a pothole, soft edge, or other hazard. Our local roads, especially in the bush, are a dangerous disgrace.

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Local councils are responsible for 75 per cent of our nation’s roads. But many regional and remote councils cannot afford to maintain roads to a safe and acceptable standard. Grattan has estimated that an extra $1 billion a year is needed just to keep the roads in the same state they’re in today.

Along with providing core services like roads, councils are expected to provide an ever-expanding range of services to their communities – in part due to cost shifting from state and federal governments.

And while the range of services councils are expected to provide has grown, so has the cost of delivering them. Federal untied funding has not kept pace.

Many councils do not have a realistic way to raise the additional revenue needed themselves. Regional and remote councils already place a high rates burden on lower-income communities, and states impose restrictions on council revenue-raising.

An ongoing and adequately indexed funding injection from the federal government is needed to ensure all councils can provide core services to their communities. Taxpayers would get better bang for their buck

if the federal government invested more in improving and maintaining local government infrastructure rather than on new megaprojects. This would also prevent costs escalating down the track, since delayed

maintenance works only makes restoration more costly when the asset becomes unusable.

This funding injection should be untied, allowing councils to spend the money on the services that are priorities for their residents and ratepayers.

But it’s not only a matter of new money. Taxpayers would also get better value if funding went to the councils that need it most. Too much funding is going to self-sufficient councils, while those with large road networks and limited revenue-raising abilities are missing out.

Councils would also benefit from a reduction in the morass of red tape they face when it comes to tied grant funding. Councils are obliged to spend part of any Roads to Recovery grant on road signs acknowledging the federal government as the funding source, and to get the money out the door within six months; tied state grants sometimes favour projects that aren’t priorities for local residents.

But extra money, even if it’s better targeted, still won’t fix the problem. A Grattan survey of 81 councils found that almost 40 per cent of councils do not have the long term financial plans and asset management plans required by state legislation. And many lack basic data on their assets: a quarter do not know how many bridges they manage.

These shortcomings prevent councils from getting the most out of the funding they do have. They arise because councils lack the staff,

technology, and data to do better. Federal and state governments can take practical steps to address these problems, starting with helping councils to collect basic, standardised data.

Dominic Jones

Dominic Jones is an Associate at Grattan Institute. He has previously worked as a research assistant in the Australian Research Council Centre of Excellence in Exciton Science where he investigated applications of quantum spin to solar technology.