Enduring financial sustainability through “bottom-up” local authority ingenuity and rational “top-down” state regulation: the case of Lake Macquarie City Council

For decades Australian policy-makers have relied on the blunt instrument of forced amalgamation to reform local government. However, a host of recent public inquiries has demonstrated that despite compulsory mergers in all states, except WA, financial unsustainability has become more acute. Using the case study of the successful achievement of ongoing financial sustainability by Lake Macquarie City Council in NSW through its resourceful “bottom-up” use of the “top-down” financial parameters set for NSW local government, this paper argues that state governments should concentrate on “process change” by establishing sound “top-down” regulatory frameworks thereby enabling “bottom-up” ingenuity by local authorities rather than “structural change” through compulsory mergers.