The establishment of the Local Government Funding Vehicle (LGFV) is a significant milestone within the Australian local government sector, and has been labelled as a ‘revolution in municipal finance’ within the banking industry. From the almost crippling effects of the $400 million defined benefit superannuation shortfall in 2012/13, the sector has rallied together to establish a cheaper source of funding that has the potential to save councils in excess of $100 million over the next 10 years.
Rather than being at the mercy of the banks, we are now in a position where we can source funding at a cheaper rate than the banks themselves, as was demonstrated through the first issuance of the LGFV in November this year.
We also received a lot of positive media coverage following the launch. The ongoing support of councils on projects such as the LGFV, Maternal and Child Health Information System and energy efficient street lighting is critical to ensuring both improved service delivery and the long-term financial sustainability of the sector.
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