In early 2011, SGS Economics and Planning partnered with Economic Development Australia (EDA) to prepare the
2011 National Survey of Local Government & Economic Development. This national survey was developed to identify:
• How economic development within local government was resourced;
• Key economic development issues facing local communities;
• How local governments were responding to these key issues;
• The effectiveness of this local government response; and
• The perceived quality of key partnerships for economic development.
This article summarises selected elements of the survey results, namely how economic development within local
government is resourced and structured, and how economic development partnering is perceived by local government.
Representatives of 72 Local Government Areas (LGAs) provided substantially completed responses to the survey.
Respondent LGAs represent approximately 13% of all (559) LGAs across Australia, as highlighted in Figure 1 below.
As at 2010, the population of the respondent LGAs represent approximately 28% of the Australian population.
Completed surveys were received from Queensland (35% of respondents), Victoria (30%), Western Australia (11%)
New South Wales (8%), South Australia (5%) and Tasmania (4%) with the remaining 7 percent from unknown origins.
Figure 1 Distribution of respondent LGA's (Source: SGS Economics and Planning)
Of the 72 responses represented, 64 responses (89%) came from local government authorities themselves, and a
further 7% from agencies engaged by local government to deliver economic development functions.
The respondent LGAs were coded ex-post into different segments, reflecting their characteristics of being either
predominantly ‘urban' or ‘rural'; and being either ‘fast growth', ‘slow growth' or ‘negative growth' in terms of population.
These categorisations drew from the ABS's GIS based publications of local government boundaries and urban
locality boundaries, and Population Growth statistics (ERP 2010, ABS. Cat No. 3218.0).1 Accordingly, 49% of
LGAs (35 LGAs) were classified as urban, while the remainder were classified as rural (51%, or 37 LGAs). Most
LGAs were classified as slow growth (41 LGAs, or 58%), while 24 LGAs (34%) were classified as fast growth LGAs
and 6 LGAs (8%) were classified as negative growth LGAs.
Economic Development Resourcing
The survey asked ‘Does your Local Government have a current, active and documented economic development strategy?'
There were 64 respondents to this question (an 89% response rate) and 73% of respondents have a current, active and
documented economic development strategy. A slightly higher proportion of urban LGAs (75%) were found to have a
current strategy than rural LGAs (72%). LGAs with a growing population (76%) were more likely to have a strategy than
those with negative population growth (40%).
There were 63 respondents to the question, ‘Approximately how many full time equivalent employees does your
organisation dedicate specifically to economic development functions (excluding administrative support staff)?',
equating to an 88% response rate. The survey found that respondent LGAs dedicate an average of 3.4 full time
equivalent (FTE) staff to economic development functions. The majority of respondents dedicated between zero and
six staff, while one LGA had 21 staff dedicated to this arena. On average, urban LGAs employ more than twice the
number of economic development staff than rural LGAs (4.6 average FTE staff and 2.2 average FTE staff, respectively).
Locations with fast population growth employ the most staff (4.39 average FTE staff), followed by LGAs with slow
growth (3.1 average FTE staff), with LGAs experiencing negative growth having the least economic development staff
(1.35 average FTE staff).
The greater number of economic development staff in urban areas and in LGAs with fast population growth indicates
that there is greater access to financial resources in these locations. Furthermore, these locations may provide
greater opportunities for economic intervention, such as locational advantages for businesses, and present a stronger
business case for economic development agents who are promoting investment and business attraction. By contrast,
financial and resourcing constraints in rural and slow and negative growth LGAs limit the ability for greater investment
in economic development activities to stimulate growth.
To gauge how LGAs fund economic development, the survey asked four questions. ‘What is the approximate annual
budget of your organisation dedicated to economic development functions?', ( to which there were 57 respondents,
representing a 79% response rate); ‘Over the past 5 years, has your organisation's investment in economic
development functions increased, decreased, or remained unchanged?' (generating 63 respondents, or an 88%
response rate); ‘What are the major funding sources of your organisation's economic development functions
(excluding dedicated ‘project funding')? (62 respondents, or an 86% response rate); and ‘What are your organisation's
major dedicated ‘project' funding sources?'(61 respondents, or an 85% response rate).
On average, LGAs budget $863,000 annually for economic development, including an average of $1,160,000 for urban
LGAs and $597,000 for rural LGAs. The average budget for fast growth LGAs was $1,117,000, while the budget for
negative growth LGAs was $595,000. The average annual budget across all LGAs is split between operational (48%),
project (41%) and other funding (11%).
Urban and faster growing LGAs have higher average budget allocations for economic development, while rural and
negative growth LGAs have the lowest budget allocations. Survey responses indicate that negative growth LGAs
are more likely to allocate their limited funds towards projects rather than operational activities. This suggests
that project funding is of greater priority for local government, with operational expenditure fluctuating with the
availability of financial resources. All other segments allocated close to half the annual economic development
budget towards operational activities.
Broadly, funding for economic development has increased over the past five years, with 68% of respondent LGAs
indicating that funding had increased. 10% of LGAs indicated that funding had decreased over this time, while
the remainder indicated that funding remained relatively unchanged. A similar proportion of urban and rural
respondent LGAs reported increased, decreased or unchanged funding over the past five years.
The segment based analysis reveals that LGAs with a fast growing population were more likely to have
increased their funding of economic development activities in the past five years. Conversely, LGAs with a
slow rate of population growth were more likely to have left funding unchanged. All LGAs experiencing
negative population growth have indicated that they have increased their economic development funding.
This trend likely reflects recognition of the role of economic development funding in stimulating local
business and population growth.
Funding for economic development functions is predominantly internally sourced from Council, equating to
an average of 80% across all LGAs. Special rates/levies account for 7% of funding, while grants and
sponsorship account for 10% and 2%, respectively. The segment based analysis reveals that urban and
fast growth LGAs sourced a greater proportion of economic development funding internally, while slower
growth and rural LGAs were more reliant on grant funding for operational and other non-project related
Funding for dedicated economic development projects was substantially more likely to be underwritten by
grants, when compared with non-project funding. Nevertheless, internal funding remained the primary
source of financial contribution.
The segment based analysis reveals a similar trend to that observed for non-project funding. Urban and fast
growing LGAs were more likely to rely on internal funding sources (75% and 59%, respectively), while slower
growth and rural LGAs were more likely to seek alternative funding sources such as grants or special rates
and levies. Several slower growth LGAs in particular, underwrote economic development project funding
through commercial activities.
Economic Development Partnering
The survey asked questions which relate to economic development partnering with state government and with
Regional Development Australia. There were 50 responses to each of the following questions, ‘How well
does your Local Government work with your State Government on economic and regional development issues?',
and ‘How well does your Local Government work with your RDA Committee on economic and regional
development issues?', representing 69% of all survey respondents. The survey required respondents to answer
using a scale of 1 to 5, where 1 represented ‘not at all' and 5 represented ‘very well'.
All LGAs rated their working relationships with their state governments as relatively high, with an average
ranking of 3.7 across all LGAs and state averages ranging between 3.2 and 4. Opportunities consistently
nominated for future collaboration include infrastructure funding, improved communication, partnership for
program delivery, and land use planning.
Queensland LGAs gave the highest average score of 4. In addition to the opportunities identified above,
future opportunities for collaboration that were identified by Queensland LGAs included the decentralisation
of services and industry through the creation of regional hubs for education, health and business support
services to attract young professionals, as well as disaster management.
New South Wales LGAs gave an average score of 3.75. Survey respondents identified future opportunities
for collaboration as improved communication, specifically listening to local perspectives on local economic
development opportunities, and programs offered by state and federal government in areas of joint interest,
such as manufacturing, cluster development, creative industries, young entrepreneurs, small business
incentives, skills development, and export facilitation.
Victorian LGAs gave an average score of 3.7, equal to that of the overall national average. Responses indicated
that future opportunities for collaboration between LGAs and state government include the delivery of regional
programs that are specifically tailored to regional needs, rather than urban programs being rolled out regionally.
Other recommendations included commitment to a whole of region approach and that smaller communities be
genuinely supported in a regional plan. Investment attraction and investor certainty were also nominated as
future opportunities for collaboration. Many responses involved infrastructure provision, including improved
public transport linkages and the national broadband network.
South Australian LGAs gave an average score of 3.3. Improved communication, long term infrastructure and
services planning, master-planning significant employment land sites and regular structured engagement on
economic development issues were all highlighted as future opportunities for collaboration.
Tasmanian LGAs gave an average score of 3.3 and nominated that future planning for infrastructure needs and
working collaboratively with neighbouring councils and the state government (without the state necessarily
taking the lead role) were important collaboration opportunities.
Western Australian LGAs gave the lowest average score of 3.2. Survey respondents indicated that the
provision of current useable information was an area of focus for future collaboration between local and state governments.
Regional Development Australia
Typically, respondents ranked the working relationship between local government and Regional Development
Australia Committees as lower than that with state government, at an average score of 3.1. In many cases
however, this was noted to be a result of the comparative difference in the length of the working relationship.
Key opportunities consistently nominated for future collaboration included infrastructure funding assistance,
participation in regional planning and project delivery, advocacy on behalf of local government priorities, and
information sharing with local economic development staff.
Queensland had the highest average score of 3.6. As well as assistance with infrastructure funding, investment
attraction and information sharing, survey respondents highlighted that development and implementation of
significant regional projects would benefit from future collaboration between local government and Regional
New South Wales was the next highest rated state, scoring an average of 3.25. Survey responses nominated
that identifying priority regional issues, connecting funding with priorities and providing support for identified
plans were opportunities for collaboration with Regional Development Australia. In addition, communicating
issues and infrastructure investment were highlighted.
Victoria had an average score of 3.2. Advocacy, support and information flows were identified as being
important collaborative elements, as were skills education and attraction, specifically in relation to a digital
economy. In terms of funding, it was recommended that collaboration between local government and Regional
Development Australia involve funding allocation to regions, rather than municipalities, increasing funding
support to local government for infrastructure, service and program provision, and helping local government
secure investment. Responses also recommended that collaboration occur as part of regional forums, in
the implementation of regional plans and in creating local employment opportunities.
Western Australia scored an average of 3. Survey respondents nominated that collaboration between local
government and Regional Development Australia could assist the development of a regional economic
development strategy and in the provision of supporting information and input as needed.
Tasmania scored an average of 2.6, however no future opportunities for collaboration were recommended by
respondents. South Australia scored lowest with an average score of 2. Regular, structured engagement
on economic development issues was identified as a future opportunity for collaboration.
Full details of the National Survey of Local Government and Economic Development can be downloaded from
SGS's website www.sgsep.com.au
1. Population growth categories were allocated on the basis of average annual growth rate for the period of 2005-2010. LGAs with a growth higher than the Australian average (1.83%) were classified as ‘fast', those between zero and 1.83% were classified as ‘slow', and those below zero were classified as ‘negative'.