Financial sustainability and the imperative for reform in investment organisation in Australia's local government sector
Recent losses reported from the so-called sub-prime category have brought renewed scrutiny of the investment practices employed across the Australian local government sector. Currently, different prudential investment standards apply: an anomalous situation which suggests legislative reform is needed to introduce standardised portfolio management practices that can deliver optimal economic outcomes for communities. Any reform of investment governance within the sector, however, must be cognisant of the broader imperative of addressing the financial sustainability of the sector. Following recent investment debacles in the sector - and in the context of the rhetoric of cooperative federalism - this paper argues that uniform investment powers should be promulgated across the Commonwealth, and the local government sector empowered to develop appropriate investment objectives which feature a centralised funds management model.