IDEAS home Printed from https://ideas.repec.org/a/bla/ausact/v26y2016i2p132-140.html
   My bibliography  Save this article

A Factor Analytic Assessment of Financial Sustainability: The Case of New South Wales Local Government

Author

Listed:
  • Joseph Drew
  • Brian Dollery

Abstract

Financial sustainability in local government remains a pressing problem which has seen a host of public policy interventions, including compulsory consolidation and performance monitoring through financial sustainability ratios. In September 2014, the New South Wales (NSW) Government announced a reform program centred on increasing scale in local government to make councils ‘fit for the future’. We apply factor analysis to the financial ratios informing the NSW Government's reform initiative to identify the underlying factors for observed financial performance data. We find evidence indicating that three independent underlying factors account for the adopted measures of financial sustainability. The public policy implication arising from this study suggests that the reforms imposed by the NSW Government on NSW municipalities may only meet with limited successa.

Suggested Citation

  • Joseph Drew & Brian Dollery, 2016. "A Factor Analytic Assessment of Financial Sustainability: The Case of New South Wales Local Government," Australian Accounting Review, CPA Australia, vol. 26(2), pages 132-140, June.
    • Handle: RePEc:bla:ausact:v:26:y:2016:i:2:p:132-140
    DOI: 10.1111/auar.12092
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/auar.12092
    Download Restriction: no
    File URL: https://libkey.io/10.1111/auar.12092?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Randall G. Holcombe & DeEdgra W. Williams, 2008. "The Impact of Population Density on Municipal Government Expenditures," Public Finance Review, , vol. 36(3), pages 359-373, May.
    2. Joseph Drew & Brian Dollery, 2015. "Inconsistent Depreciation Practice and Public Policymaking: Local Government Reform in New South Wales," Australian Accounting Review, CPA Australia, vol. 25(1), pages 28-37, March.
    3. Stewart Jones & R. G. Walker, 2007. "Explanators of Local Government Distress," Abacus, Accounting Foundation, University of Sydney, vol. 43(3), pages 396-418, September.
    4. Joseph Drew & Brian Dollery, 2014. "The impact of metropolitan amalgamations in Sydney on municipal financial sustainability," Public Money & Management, Taylor & Francis Journals, vol. 34(4), pages 281-288, July.
    5. George Boyne & Gareth Enticott, 2004. "Are the 'Poor' Different? The Internal Characteristics of Local Authorities in the Five Comprehensive Performance Assessment Groups," Public Money & Management, Taylor & Francis Journals, vol. 24(1), pages 11-18.
    6. George Boyne & Rachel Ashworth & Martin Powell, 2001. "Environmental Change, Leadership Succession and Incrementalism in Local Government," Journal of Management Studies, Wiley Blackwell, vol. 38(6), pages 859-878, September.
    7. K.G. Willis & N.A. Powe & G.D. Garrod, 2005. "Estimating the Value of Improved Street Lighting: A Factor Analytical Discrete Choice Approach," Urban Studies, Urban Studies Journal Limited, vol. 42(12), pages 2289-2303, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joseph Drew, 2018. "Playing for keeps: local government distortion of depreciation accruals in response to high-stakes public policy-making," Public Money & Management, Taylor & Francis Journals, vol. 38(1), pages 57-64, January.
    2. Guyot, Alexis & Doumpos, Michael & Zopounidis, Constantin, 2016. "A novel multi-attribute benchmarking approach for assessing the financial performance of local governments: Empirical evidence from FranceAuthor-Name: Galariotis, Emilios," European Journal of Operational Research, Elsevier, vol. 248(1), pages 301-317.
    3. José Luis Zafra-Gómez & Antonio Manuel López-Hernández & Agustin Hernández-Bastida, 2009. "Developing an alert system for local governments in financial crisis," Public Money & Management, Taylor & Francis Journals, vol. 29(3), pages 175-181, May.
    4. Lotta-Maria Sinervo, 2020. "Financial Sustainability of Local Governments in the Eyes of Finnish Local Politicians," Sustainability, MDPI, vol. 12(23), pages 1-16, December.
    5. Christopher B. Goodman, 2019. "The Fiscal Impacts of Urban Sprawl: Evidence From U.S. County Areas," Public Budgeting & Finance, Wiley Blackwell, vol. 39(4), pages 3-27, December.
    6. Bernardino Benito & María-Dolores Guillamón & Ana-María Ríos, 2017. "The electoral budget cycle on municipal waste collection expenditure," Applied Economics, Taylor & Francis Journals, vol. 49(41), pages 4161-4179, September.
    7. Nora Libertun de Duren & Roberto Guerrero Compeán, 2016. "Growing resources for growing cities: Density and the cost of municipal public services in Latin America," Urban Studies, Urban Studies Journal Limited, vol. 53(14), pages 3082-3107, November.
    8. Chin†Huang Huang, 2017. "Estimating the environmental effects and recreational benefits of cultivated flower land for environmental quality improvement in Taiwan," Agricultural Economics, International Association of Agricultural Economists, vol. 48(1), pages 29-39, January.
    9. Christopher T. Boyko & Rachel Cooper, 2013. "Density and Decision-Making: Findings from an Online Survey," Sustainability, MDPI, vol. 5(10), pages 1-21, October.
    10. Joseph Drew & Brian Dollery, 2015. "Debate: Rejoinder to Sansom (2015)," Public Money & Management, Taylor & Francis Journals, vol. 35(6), pages 395-396, November.
    11. Bruno Emmanuel ONGO NKOA & Derick Ulrich YOUNDA, 2022. "L’urbanisation accroît-elle l’assiette fiscale locale dans un contexte de décentralisation en Afrique subsaharienne ?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 55, pages 93-111.
    12. Mariola Kapidani, 2018. "Financial Condition Analysis of Municipal Units in Albania," MIC 2018: Managing Global Diversities; Proceedings of the Joint International Conference, Bled, Slovenia, 30 May–2 June 2018,, University of Primorska Press.
    13. Ralf Meinhardt & Sebastian Junge & Martin Weiss, 2018. "The organizational environment with its measures, antecedents, and consequences: a review and research agenda," Management Review Quarterly, Springer, vol. 68(2), pages 195-235, April.
    14. Antulov-Fantulin, Nino & Lagravinese, Raffaele & Resce, Giuliano, 2021. "Predicting bankruptcy of local government: A machine learning approach," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 681-699.
    15. Stewart Jones & Nurul Alam, 2019. "A machine learning analysis of citation impact among selected Pacific Basin journals," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(4), pages 2509-2552, December.
    16. Heinke Roebken, 2007. "Leadership Turnover among University Presidents," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 18(2), pages 138-152.
    17. Makoto Kuroki, 2022. "Impact of Depreciation Information on Capital Budgeting among Local Governments: A Survey Experiment," Australian Accounting Review, CPA Australia, vol. 32(2), pages 201-213, June.
    18. repec:ers:journl:v:xxiv:y:2021:i:2b:p:113-134 is not listed on IDEAS
    19. Elena GORI & Silvia FISSI, 2014. "Scoring The Default Risk Of Local Authority," Journal of Public Administration, Finance and Law, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 5(5), pages 7-25, June.
    20. Joseph Drew & Brian Dollery, 2015. "Inconsistent Depreciation Practice and Public Policymaking: Local Government Reform in New South Wales," Australian Accounting Review, CPA Australia, vol. 25(1), pages 28-37, March.
    21. Khushbu Agrawal & Chanchal Chatterjee, 2015. "Earnings Management and Financial Distress: Evidence from India," Global Business Review, International Management Institute, vol. 16(5_suppl), pages 140-154, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ausact:v:26:y:2016:i:2:p:132-140. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1035-6908 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.