The debate on Australian federalism: Local government financial interrelationships with state and commonwealth governments

The nascent debate on Australian federalism has hitherto focused almost ent irely on Commonwealth-state interrelationships to the virtual exclusion of local government. Since Australian local government employs around 156,000 people and spends in excess of $10 billion this neglect is unfortunate. In an effort to at least partly remedy this oversight, the present paper seeks to assess various unsettled questions in local government financial relati onships with both Commonwealth and state governments, especially the issue of financial assistance grants and their efficiency consequences.