‘Wake up call’ for six new councils in financial strife
Growing numbers of councils are being flagged as unsustainable by the state’s independent regulator, SA Water stepping in to support one embattled region. Is your council one of the battlers?
Berri Barmera, Ceduna, Coober Pedy, Peterborough, Kangaroo Island and Southern Mallee District councils are all in financial strife, ranked as “unsustainable” by the Essential Services Commission.
The findings, released this week, found nine out of 19 councils would be financially unsustainable in the next 10 years, in addition to the six already facing financial trouble.
They join Alexandrina, Tumby Bay, Renmark Paringa, Flinders Rangers and Wudinna councils, which were found to be unsustainable last year.
Whyalla, Onkaparinga, Clare and Gilbert Valleys, Robe and Northern Areas were also found to be unsustainable in 2024.
But the embattled Coober Pedy District Council – which has been in administration since 2019 – has this week been buoyed by an SA Water announcement.
Government-owned SA Water would take over the council’s water management by the end of 2026, with the state government saying it would be relieving the council of the “catastrophic” risk.
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Coober Pedy Council’s water infrastructure has not been upgraded since it was built in the 1970s and faces leakage and outdated metering, which the report said had a “likely and catastrophic risk of failure”.
Coober Pedy District Council Principal Administrator Pat Conlon said water infrastructure was “the single greatest concern” to administrators and council staff.
The move is expected to alleviate some of the financial pressure on the council, which is challenged by its need to deliver essential services.
“Coober Pedy’s water infrastructure desperately needs investment in repair and maintenance the council has no ability to provide,” Conlon said.
Local Government Minister Joe Szakacs said SA Water taking over Coober Pedy water services is “so much closer” to seeing the council escape administration.
Szakacs said the latest reports should be seen as “a wake up call” and “puts irresponsible councils on notice”.
This week’s findings were the last in a mandatory four-year scheme introduced during the Marshall Government’s 2021 local government reforms, designed to give independent financial advice to councils instead of rate capping.
The commission found trends across financially troubled councils over the four years, including historically underfunding asset renewals and some councils having an over-reliance on increasing rates above the forecasted inflation rate.
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Szakacs said the process was “positive” because “it highlights pressure points within our local government sector”.
“I’ve been advocating directly to the Federal Government for an increase in support they provide our councils through their Financial Assistance Grants,” Szakacs said.
“Over the past 30 years we’ve seen a consistent decline in the relative support through these grants to the point where these funding streams now account for half of what they did as a share of federal taxation revenue in the 1990s.
“With that said, this should also serve as a wake up call to councils across our state that they need to balance their budgets, as governments at all levels – and even households – need to.
“It’s incumbent on councils to identify what services their communities need and prioritise the delivery of those.”
LGA South Australia CEO Clinton Jury told InDaily in 2025 that local councils were “being asked to do more than ever, despite the challenging economic climate and federal funding being nearly half of what it was 30 years ago”.
“Roles that were traditionally state and federal responsibilities – such as aged care, childcare, environmental health, climate adaptation and housing – are now being picked up by councils because there’s a local need or gap,” Jury said.
One of the financially troubled councils, Kangaroo Island, said that its report “validated” the council’s current direction to get its finances in order.
“There are no surprises in this report. The findings are very much in line with what we identified and self reported eighteen months ago,” Kangaroo Island mayor Michael Pengilly said.
“While the report highlights historical issues, the good news is that we didn’t wait for an external review to take action. We have been proactive in facing these challenges head on.”
Berri Barmera, Ceduna, Coober Pedy, Peterborough and Southern Mallee District councils were contacted for comment.
