ABSTRACT: There is a crisis in the funding of infrastructure backlogs across urban Australia, and nowhere is this more marked than perhaps in the outer metropolitan growth councils of our large cities. This paper looks at the infrastructure challenges facing Perth’s outer metropolitan growth councils, which includes the high growth cities of Mandurah, Rockingham, Swan and Wanneroo. Land development and the growth in population on the urban fringe is a double-edged sword, for while it brings increases in rate revenue it also generates significant growth in the demands for services. As new communities develop and population grows, the growth in rate bases generally enables councils to maintain operations and extend services to the newer areas. However, it does not generate sufficient funds for councils to address existing and emerging capital infrastructure needs. The current system for allocating financial assistance grants to local governments, based on the principle of horizontal equalisation, has channelled minimal grant funding to the outer metropolitan growth councils. The councils have had mixed success in sourcing funds from other State and Commonwealth programs. The paper emphasises the important role of local government in supporting the fabric of suburban life. The capacity of local governments to provide key community infrastructure is thus a matter of importance in our reflections on sustainability and city growth