Rural and regional councils across New South Wales are expressing relief following the Federal Government's announcement that it will restart a parliamentary investigation into the financial challenges facing local government.

The Standing Committee on Regional Development, Infrastructure and Transport will resume its examination of Local Government Financial Sustainability after the inquiry was suspended when the federal election was called in May.

The decision to reconvene has been welcomed by local government representatives who see the inquiry as crucial to addressing mounting budget pressures. Mayor Rick Firman, who chairs the NSW Country Mayors Association, praised Minister McBain for championing the decision to restart the investigation.

The level of community and sector interest in the inquiry remains evident, with participation during the first phase drawing engagement from more than 280 organisations and individuals who provided evidence through submissions or appearances at public hearings. Before the inquiry lapsed, an interim report had already documented concerning trends affecting councils throughout Australia.

The investigation revealed that local government responsibilities have grown substantially beyond their traditional scope, with communities now expecting councils to provide an ever-expanding array of services and facilities. However, the financial resources available to councils have not kept pace with these increased expectations. The interim findings highlighted that revenue sources and funding mechanisms have weakened precisely when service delivery demands have intensified, creating a sustainability crisis for many local authorities. Of particular concern were the findings relating to councils in regional and rural areas.

The inquiry determined that smaller councils serving country communities confront fundamentally different obstacles compared to urban local government areas. Issues around geography, population density, infrastructure distances and economic base create unique pressures that require tailored solutions rather than one-size-fits-all policy approaches.

These observations resonate strongly across inland New South Wales, where councils managing communities from the Riverina through to the far west must maintain roads, water systems, waste services and community infrastructure across enormous distances while serving relatively small populations.

The financial mathematics of delivering essential services becomes increasingly challenging as geographical spread increases and ratepayer numbers decline.

The resumption of the inquiry offers regional councils an opportunity to present evidence about the structural challenges they face and to advocate for funding models that acknowledge the distinct circumstances of rural local government. Many councils have been operating in increasingly precarious financial positions, forced to defer infrastructure maintenance, reduce service levels or pursue rate increases that place additional burdens on communities already facing economic pressures.

The final inquiry report and any resulting recommendations will carry significant weight for councils throughout regional New South Wales. Local government representatives hope the investigation will lead to meaningful reform of funding arrangements and recognition that the current fiscal framework inadequately supports councils serving rural and regional Australia.

The NSW Country Mayors Association, which represents non-metropolitan councils across the state, continues to advocate for policy changes that would enable regional local government to fulfil its obligations to communities while achieving long-term financial sustainability. The reconvened inquiry represents a critical opportunity to advance these objectives at the federal level.