Local councils play a vital role in Australia’s social fabric. They provide active community hubs for learning and connection, deliver essential social and health services, and maintain much of the infrastructure that underpins daily life. This report looks at how state and federal governments can partner with local councils to better deliver some of the critical services communities rely on like disaster recovery, child care, aged care, mental health support and more. 

The report examines local-state partnership approaches in health and wellbeing, with a particular focus on Victoria and South Australia where some examples have operated for a number of years. The report is written for all Australian jurisdictions at various points of the journey towards healthier communities.

Key findings

• Council funding has declined over three decades from 1% of tax revenue in the 1990s to 0.49% in 2026-27. At the same time, the expectations of local government has expanded.
• Council budgets are under immense pressure. This is especially true for regional councils.
• When people’s needs are neglected, disaffection becomes the norm. Trust in institutions and democracy declines, and social cohesion frays.

Drawing on case studies of successful partnerships in Victoria and South Australia, the report identifies four strategies for effective partnerships: 

1. establish clear, formal partnership agreements: outlining mandates in legislation isn’t enough, we need ongoing dialogue around priorities
2. design for long-term sustainability: provide flexible funding, investments in learning and evaluation, and transparency on when and how programs and funding will be wrapped up
3. prioritise capability-building: building public sector muscle for partnership is a two-way street – local governments can bring critical on-the-ground understanding of the issues affecting their communities, while state governments can bring public health expertise and statewide networks and data
4. centre local knowledge and expertise in the design of initiatives: communities often know best about what they need and about what will work in their community.