As much as $55 billion worth of infrastructure assets that are owned by local councils across Australia is in poor condition, a new report has found.

Published by the Australian Local Government Association (AGLA) in partnership with the Institute of Public Works Engineering Australasia, the 2024 National State of the Assets Report analysed the condition, function and capacity of assets held by the nation’s 537 local councils.

Overall, it found that two-thirds (65 percent) of local government infrastructure assets are in good condition.

However, 8 percent of assets are in poor condition whilst a further 27 percent are in fair condition only.

Assets which are in poor condition have significant defects that require higher order costs and/or interventions.

Meanwhile, 7 percent of local government infrastructure assets do not have adequate functionality to meet their program or service needs whilst 8 percent lack sufficient capacity in their current state to meet demand requirements.

The report suggests that modest improvements have been observed since the previous report was released in 2021.

At that time, 10 percent of local government infrastructure assets were in poor condition.

The improvement followed an increase in Commonwealth funding for local asset maintenance and repairs which occurred as part of COVID stimulus measures.

The report highlights the asset-intensive nature of local government.

Combined, the nation’s 537 local councils have $643 billion worth of assets under their control.

This is ten times the $60 billion in combined revenue that was recorded across the councils in 2022/23.

Of those assets held by local councils, almost two-thirds ($424 billion) are infrastructure assets.

This is made up of local roads, stormwater facilities, council/community buildings and facilities, waste & wastewater facilities, local parks and recreational facilities, bridges and footpaths and cycleways.

All up, the report estimates the replacement value of infrastructure assets which are in poor condition, function or capacity at between $50 billion and $55 billion.

That means that on aggregate, it would take the nation’s 537 councils almost an entire year worth of revenue to replace all of these assets.

In addition to overall challenges, the report highlights particular issues regarding specific types of assets.

One example is bridges.

In rural and regional areas, a significant number of old timber bridges are beyond their useful life and are no longer fit for purpose.

This is the case despite heavy investment by road authorities including local governments.

Many of these bridges are located on ‘low order’ roads and miss out on grant funding which is allocated to ‘high order’ roads.

This is the case notwithstanding potential first and last mile implications of these bridges being left in poor state.

Another example is stormwater assets.

According to the report, a significant portion of existing drainage infrastructure is decades old and is designed to meet standards which are no longer appropriate in light of current and future climate related impacts.

In urban areas, a large number of these legacy assets require upgrades and retrofits to meet current flooding and climate change conditions. Executing such work beneath densely populated areas is costly and involves significant engineering challenges.

In rural areas, open drains which are often not designed to achieve urban drainage outcomes will need to be upgraded in case where cities and suburbs expand into these locations.

Adding to these challenges more broadly in respect of stormwater management is a lack of dedicated funding sources, multi-governance and ownership structures, an expansive network of increasing aging assets, growing stringency in water quality regulations and concerning projections relating to climate change.

As a result, the report warns that in absence of significant intervention, the performance of stormwater systems is likely to decline into the future.

Local Council Asset Snapshot

ALGA President Councillor Linda Scott welcomed the aforementioned improvement in asset conditions.

But she warned that challenges remain and called for financial assistance grants which are paid to local councils to be increased to at least one percent of overall taxation revenue.

“Often the infrastructure funding councils receive is limited to delivering new projects and doesn’t include support for ongoing maintenance,” Scott said.

“It is untied funding – including through federal Financial Assistance Grants – that allows us to sustainably manage our local community infrastructure and services.

“With you (AGLA members), ALGA continues to advocate for Financial Assistance Grants to be restored to at least one per cent of Commonwealth taxation revenue, so we can maintain, refresh and revitalise the local facilities and services that Australians use every day.

“It is vital that we continue to invest in our communities, so the costs of infrastructure renewal aren’t passed on to future generations.”

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