Recognising the role of local government in enhancing national productivity

Local governments across Australia are pivotal in shaping the nation’s productivity.

While their contributions are sometimes overshadowed by state and federal counterparts, councils remain the frontline stewards of infrastructure, regulation, and community development—factors that directly influence economic performance and societal wellbeing.

The Federal Government is about to hold an Economic Reform Roundtable to unlock new ideas and build consensus around reforms. This discussion is being guided by the Government's so-called "five pillar productivity growth agenda". These pillars are:

1. Creating a more dynamic and resilient economy.
2. Investing in the net zero transformation.
3. Building a skilled and adaptable workforce.
4. Harnessing data and digital technology.
5. Delivering quality care more efficiently.

Public commentary in the lead up to the Roundtable has often focussed on the business community’s push for industrial relations changes, or whether the Federal Government has an appetite for more substantial tax reform.

It may not be as headline inducing, but local government demonstrably has a significant role to play in delivering the productivity agenda, and is a fundamentally necessary voice to have present in any serious public discussion about how we can best realise these national goals.

So let's go through the Federal Government's five pillars and explore how local councils can help:

1. Creating a more dynamic and resilient economy

Councils underpin local and national growth by managing critical infrastructure and enabling vibrant communities. Through urban renewal projects and efficient regulation, they facilitate new business opportunities and support labour markets.

For example, Brisbane’s transformation of disused industrial sites into lively mixed-use precincts, such as the Howard Smith Wharves redevelopment, generated over 1,000 jobs and attracted more than 2 million visitors in its first year.

Local government initiatives like these across the country build economic resilience, support local enterprise, and attract talent and investment.

2. Investing in the net zero transformation

Local governments drive Australia’s shift to a low-carbon economy through climate action and sustainable resource management.

The City of Hobart, for instance, has achieved a 21% reduction in carbon emissions over the past decade and diverts more than 12,000 tonnes of organic waste from landfill annually via city-wide FOGO (Food Organics and Garden Organics) bins.

Such initiatives set a national benchmark for environmental responsibility and foster the circular economy at a local level.

3. Building a skilled and adaptable workforce

Councils play an active role in workforce development, supporting skill-building initiatives and partnering with educational institutions and industry.

Cities like Logan in Queensland have gained recognition for their proactive planning and local labour market programs, nurturing innovation and entrepreneurship.

Councils’ investment in placemaking and urban renewal further stimulates employment, as seen in major redevelopments across metropolitan and regional areas.

4. Harnessing data and digital technology

Embracing digital transformation enhances both service delivery and citizen engagement. Perth’s “Innovation Hub” exemplifies this effort, having supported more than 400 startups since its inception and bringing over 75% of council services online.

The Smart Cities pilot project in East Perth has also led to a 10% improvement in energy efficiency across participating buildings, showcasing the power of data-driven decision-making for community benefit.

5. Delivering quality care more efficiently

Efficient and innovative service delivery is a hallmark of high-performing councils. Through digital services and community-focused care programs, local governments improve access and outcomes for residents.

The expansion of online platforms and streamlined customer service, as seen in many major councils, ensures that community needs are met more effectively and equitably, freeing up resources for reinvestment in frontline care and infrastructure.

A shared productivity agenda

Clearly, there is considerable scope for both federal and state governments to enable councils to maximise their contribution to national productivity growth through partnering on initiatives like:

• Local Infrastructure:
  Upgrading transport networks, digital connectivity, and public amenities to reduce costs and expand market access.

• Reforming funding models:
  Addressing cost-shifting, increasing fiscal support, and improving equalisation mechanisms to enhance local government capacity.

• Supporting workforce development:
  Partnering with educational institutions and business to expand skills and facilitate labour mobility.

• Enhancing digital capabilities:
  Investing in applications of AI and smart city technologies, and improving data sharing for integrated planning and service delivery.

• Promoting climate resilience:
  Implementing green infrastructure and circular economy initiatives to future-proof communities.

Australia’s local governments are essential contributors to the national productivity agenda across each of the Federal Government’s five pillars - dynamic economy, net zero transition, workforce adaptation, digital technology, and efficient care – all of which are at the heart of councils ensuring that our communities thrive in a rapidly changing world.

There is opportunity for all levels of government in Australia to come together to address funding and policy barriers, and embrace strategic reforms that will further unlock Australia’s productivity potential.

Local Government needs a presence and a strong voice at the Economic Reform Roundtable, matched by a keen and receptive ear from the Federal Government.

---

This article was originally published on LinkedIn:

https://www.linkedin.com/pulse/recognising-role-local-government-enhancing-national-productivity-rur2c/