ABSTRACT
Local governments are a small but critical component within the Australian federal system of government, and they played an important role in the broader governmental response to the financial crises that emerged across the developed world from the second half of 2007. The role played by local governments in Australia focused on both planning for the potential impacts of economic downturn, and serving as an efficient conduit for stimulus spending by the Australian government. The ways in which Australian local governments responded to the economic downturn reflected the broader position of the Australian economy in the decade leading to the onset of economic turmoil, the long-term standing of local government relative to the other two tiers of government, and the nature of the Australian government’s response – under then Prime Minister Kevin Rudd – to this economic challenge. This chapter begins by establishing the background conditions that shaped the part played by local governments in responding to the threat of recession. It starts with an examination of local government within the Australian federal system, before moving on to sketch out economic conditions in Australia over the period 2005 to 2010 and the influence those macro-economic settings have had on the actions of government. The chapter then outlines the Australian government’s response to foreshadowed economic crisis and its articulation with local government, before moving on to consider the national programmes directed to local governments and their implementation. Finally, the chapter considers the broader implications for the nature of Australian federalism and the role of local government over the coming decades. It considers the future delivery of economic stimulus measures and the ways in which public programmes can and should be delivered.
