Australia Democracy, devolution and governance , Housing and planning

The Future of Local Government – insights from Tasmania’s review process



Local government in Tasmania has played an important and well-established role in service and infrastructure provision. With British colonisation, local government was gradually formalised over the 19th century, culminating in the Local Government Act 1906, which created 51 local government areas. The last major reforms were boundary changes in 1993, with water and sewage reforms in the 2000s. Most recently, compulsory voting has been legislated to encourage greater democratic participation in council elections.

In recent years, and as in other parts of the world, state governments have been reluctant to promote ambitious reforms and instead have adopted a more incremental approach focusing on shared services, voluntary amalgamations, and improving governance and integrity at a local level. Real reform of Tasmanian local government has remained largely elusive.

While the sector is not in crisis – there isn’t a burning platform for change – there is an acceptance that many local governments lack the resources and capability to provide the services and functions that communities will need into the future. The role of local government is changing, and reform will be necessary to address long-term challenges and deliver local solutions to many of the complex problems the Tasmanian community is facing.

Aims and approach of the Future of Local Government Review

The Future of Local Government Review (the Review) is innovative and represents a departure from recent (and largely unsuccessful) local government reviews across Australia. Like New Zealand’s current review, Tasmania’s is significant for its first principles emphasis and future-oriented focus, seeking to establish what the most valuable and important roles for local government will be moving forward, before developing reforms to support these future roles.

Designed to “create a more robust and capable system of local government that is ready for the challenges and opportunities of the future”, the Review stands in contrast to traditional reform agendas, which have long been characterised by a narrow focus on technical efficiency. This is not to say that efficiency or financial sustainability are unimportant, but rather it recognises that focusing on cost savings alone risks underestimating and undermining the potential for local governments to play a meaningful role fostering the wellbeing of their communities.

How the Board’s investigation in Stage 1 has informed the Priority Reform Areas

Source: Future of Local Government Review (2022) Interim Report: Review Stage 1

The Review is led by the Local Government Board, which includes a representative from The Office of Local Government (Tasmania), along with a nomination from both the Local Government Association of Tasmania and Local Government Professionals Australia (Tasmania). Having commenced in January 2022, it is anticipated the Review will take approximately 18 months to complete.

Phase One of the Review

Phase one of the Review has focused on community engagement and research to establish what Tasmanians want from local government, and what the future role of local government might be. Between February and May, the engagement program saw 20 pop-up community events, 4 sector workshops with stakeholders from relevant peak bodies and State government agencies, two online and 15 in-person community workshops across the state. An online and mail-out community survey received nearly 500 responses, and an open invitation for written submissions saw 39 received, primarily from Tasmanian local governments.

The sector was targeted through the coordinated efforts of The Local Government Association of Tasmania and the Local Government Board, with 9 regional forums for councillors and council employees, a workshop for mayors and another for general managers, as well as online sessions. In addition, the University of Tasmania has provided research papers on the history of local government in Tasmania, international trends in local government, potential future roles for the sector, and analysis of the potential expansion of shared service arrangements.

Emerging reform priorities

Background research and community and stakeholder consultation have helped identify emerging priorities for reform. As in most places, Tasmanian local governments deliver a core range of local services alongside an emerging and increasingly important set of community development, place shaping, and wellbeing roles. Unlike many other systems, however, Tasmanian councils and Australian local governments, in general, are relatively constrained in their executive powers, revenue-raising capabilities, and expenditure. They are also responsible for a considerably narrower range of core social services than is standard in most OECD countries.

It is important to note that Tasmania’s 29 local governments also vary significantly in size and the services they deliver. With considerable disparities between larger, urban councils, and small or sparsely populated rural ones – including those representing remote islands with populations of less than 1,000. Despite this wide variation, local governments around the world face many common challenges and are evolving in similar ways.

First, local governments have experienced considerable centralisation and consolidation. Opposition to amalgamations, combined with mixed evidence regarding its financial benefits, has led to a greater focus on achieving efficiencies and enhancing capability through regional service platforms, shared service arrangements, outsourcing, and state-wide purchasing strategies.

Second, local government reform initiatives have increasingly focused on addressing issues of councillor conduct, professionalism, and transparency.

Third, evidence for the growth of local government ‘place-shaping’ functions can be seen in the ever-increasing share of council budgets spent on arts, recreation, and community development. Fourth, local governments are increasingly engaging (sometimes by choice, sometimes not) in systems of regional governance. Finally, local governments are almost universally emerging as active and important players in climate change adaptation, sustainability, and broader environmental stewardship or conservation.

The cumulative result is that some functions that may previously have had a strong rationale for local democratic representation and differentiated place-based delivery are gradually being centralised. At the same time, however, new priorities are emerging. Local governments in Australia and around the world are pioneering new areas of government activity, as well as engaging more proactively in ones that may formerly have been the domain of other tiers. Given these trends, a central aim of the Review process is to establish where the local will matter most in the future.


The third theme – place-shaping – is emerging as a unifying concept and organising principle for the Review. This approach, championed by the 2007 Lyons Inquiry into Local Government in the UK, is broadly defined as “the creative use of [local government] powers and influence to promote the general well-being of a community and its citizens”. Place-shaping recognises that while globalisation and digital connections (among other factors) have radically altered daily activities and the way we live, place and local connections still matter – perhaps more so than ever.

Place-shaping offers a way to rethink the role of local governments and provide insights into potential future functions. It describes an emergent or expanding role for councils in the development and promotion of local identity through tailored, place-based responses to distinctive local needs and preferences. Although the context of the Lyons Review was quite different to Australia’s comparatively minimalist system, the basic tenets of the approach are applicable. Research commissioned by the Future of Local Government Review Board identified five (potential and overlapping) practical roles for local governments in Tasmania:

  1. Place-based decision-making and service delivery
  2. Community development and fostering local identity and engagement
  3. Representation, engagement, and advocacy
  4. Facilitation, regional governance, and strategic planning
  5. Meeting distinctive local needs

While many of these potential roles are (of course) not new, delivering them systematically and sustainably will require a realignment of local government activities, resources, and personnel towards an expanded place-shaping role.

A place-shaping role for local governments would mean there is no single ideal model for a municipal area: the functions, scale, and organisation of local governments will vary depending on the characteristics and needs of the communities they serve. Enabling local governance and decision-making is more important in more socially and economically connected communities with shared interests and distinctive identities.

In practice, this means there is often a rationale for retaining relatively small authorities in remote or regional communities. While there are potential benefits, these questions of scale and boundary reform need to be considered alongside careful analysis and consideration of the costs of retaining smaller councils and how this can be mitigated with innovative models of shared and common services.

The ultimate aim of a place-based reform agenda is to build community capital and align fragmented services and policies, such that they meet local needs and priorities and promote long-term prosperity and wellbeing.

Where to from here?

Building on the goodwill and community and stakeholder engagement to date, the next phase of the Review (through to the end of 2022) is the development and testing of more specific priority reform areas, as identified in the Interim Report. These areas are:

  1. Defining councils’ role in the 21st century,
  2. Local representation and good governance,
  3. Strategic and regional capacity,
  4. Efficient and effective infrastructure and service delivery,
  5. Sound and consistent planning and regulatory services,
  6. Operational sustainability.

Options for reform within these priority areas will be explored, primarily through focus groups comprised of individuals with specialist knowledge and experience in the areas, as well as more detailed financial analysis and economic modelling.

Targeted research and continued consultation among stakeholders will continue, including seeking out the views of unrepresented groups, such as the Tasmanian Aboriginal community and younger Tasmanians. A reform options paper will be published before community meetings (attended by the Local Government Board) to encourage the Tasmanian community to reflect and give feedback on potential reform options. Finally, phase three of the Review will recommend reforms with transition plans.

The outcomes of the review will show whether this type of future-focused reform strategy can deliver change which enables local government to meet community needs into the future.