Does financial sustainability affect local resident satisfaction? The case of the Victorian local government system

IMPACT

The authors found that financial indicators significantly affect resident satisfaction. This suggests that council managers can improve resident satisfaction by effectively addressing financial sustainability problems. From a public policy perspective, the authors’ findings show that policy intervention should be tailored to meet the specific circumstances of different kinds of local councils. In particular, ‘one-size-fits-all’ policy intervention would be counter-productive given the differences between urban and rural councils.

ABSTRACT

Almost no empirical work has been undertaken on the relationship between municipal financial sustainability and local resident satisfaction. This article addresses this gap by investigating the relationship between financial sustainability and resident satisfaction in the Victorian state local government system in Australia using a multiple regression model with a panel data structure. While there was an association between financial sustainability and local resident satisfaction, significant differences exist between rural and urban councils.

KEYWORDS:

• Financial sustainability
• local government
• resident satisfaction
• Victoria