Sustainability. It is a big word. Fourteen letters and six syllables and all sorts of connotations and, I think it would be fair to say, no complete understanding in what it actually means. There is a lot of talk about sustainability in local government circles at the moment but I don’t see too many councils hanging up a sign that says “gone broke”. Many people think of an organisation ‘going broke’ in terms of the technical definition of the Corporations Act 2001. That is, from Section 95A of the act: A company is solvent if, and only if, the company is able to pay all of its debts, as and when they become due and payable. Strict interpretation of this legislation deems that a company is insolvent if it is unable to pay all of its debts when they are due. However, judicial interpretation over the years has provided that a company, not able to pay a debt when it falls due, may not in fact be insolvent but may be merely suffering from a temporary lack of liquidity. They may, for example, have a large asset base but no cash in the bank.

So by that strict definition, before a Council was ‘broke’ it would not only have to have no cash in the bank to pay contractors and staff and loan repayments, but the asset base would also have to be below the level of debt. If you take the example of Dubbo City Council, we have an asset base of $1.84 billion. Our annual budget is $164.9 million and we have debts of $53.9 million offset by cash in investments and in working accounts of around $65 million. To go ‘broke’ by the technical definition, not only would we have to not be able to pay our bills that are due at any given point in time but our asset base would also have to be below our level of debt. I accept that our asset base is not easily turned into cash (selling a road or a footpath or some pipes in the ground may prove problematic), but if you take the raw numbers, our Council could spend reserves and convert assets to cash for many years before we were technically ‘broke’ – but it would be a spectacular collapse when it did occur. It would possibly even rival the case of the largest corporate collapse in Australia’s history when HIH Insurance went into liquidation in 2001. Councils across Australia – in relative terms – are all in similar position: a very strong asset base and typically able to meet their ongoing debts.

Where the real issue of sustainability arises is in ongoing maintenance and renewal of assets. A Council could decide to stop spending on maintenance programs and just spend on urgent maintenance (a burst water pipe for example). That would probably be OK for a year. Maybe even a couple of years.

If maintenance and renewal programs were cut, you would gradually see more and more urgent maintenance issues. There would be more burst water pipes. There would be buildings deemed uninhabitable. You would turn on a tap and water may not come out – or, if it did, it might be brown and murky. Eventually the day would come when you flushed the toilet and, I don’t want to paint too graphic a picture for you, but what was in the toilet wouldn’t go somewhere. The ongoing deferral of maintenance would, ironically, mean that eventually more would be spent on maintenance. Most people I know book their vehicle in for its regular 10,000km service knowing that the small ongoing expense of regular maintenance is better than one day having a massive bill from a catastrophic failure – or worse still dealing with injury or death from that massive failure.

On 4 February 1735, an article published in a local Philadelphia newspaper written by Benjamin Franklin advocated for the creation of a group committed to firefighting. In this article, Franklin argued that prevention of a city-wide fire was preferable to rebuilding a burned city from scratch. It was in this context that Franklin noted that “an ounce of prevention is worth a pound of cure” and, almost 300 years later, that logic is still true.

It is important to remember that as Councillors we are but custodians of the assets of Dubbo. I don’t own Dubbo. Councillors don’t own Dubbo. The GM does not own Dubbo. But, as custodians, we are currently the group responsible for those assets. When we all started in our current positions, we took over a group of assets from the previous custodians and I believe it is our responsibility – in fact our solemn duty – to hand those assets on to the next generation and on to the next custodians in better condition than when we started in our positions. A failure to maintain our assets adequately would possibly see us going broke by a thousand cuts.

On a very specific local level, the current debate about water pricing is a perfect example of what I am talking about. If we don’t increase water rates this year, then our residents will still have good-quality drinking water. Some capital expenditure programs could be cut and residents probably wouldn’t notice much difference this year. Our water fund though, by legislation, must operate independently of our other accounts – so we can’t transfer money between general accounts and the water fund, in either direction. Eventually a lack of maintenance would see major emergency maintenance events occurring and regular water outages for residents. As no money can be taken from general revenue, the water fund would have to borrow significant funds to carry out urgent repairs. These loans would have to be repaid from the water fund which, you guessed it, would require dramatic increases in water charges. These are the sort of tough decisions that Councillors have to make on a regular basis across all councils. It would be a popular and easy decision to say no to water charge increases – or in fact say no to all increases. In the fullness of time, those ‘popular’ decisions would soon be seen as short-sighted, irresponsible and lacking foresight. More to the point, it would create dramatically more pain in the future.

So the next time you hear the word sustainability thrown around with gay abandon, quiz the person using the term and find out what they really mean by it. If someone gives a simple, easy answer to sustainability, then I am not sure they truly understand the meaning of the word.

Tell me your thoughts on sustainability at

Clr Mathew Dickerson

Mayor of the City of Dubbo

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