This report outlines the process for asset management plans (AMPs) and long-term financial plans (LTFPs) in Australia, as well as the compilation and use of financial sustainability indicators in this regard. The report examines legislation and guidelines for asset management and financial management across jurisdictions and goes on to examine recent studies on financial sustainability in Australia. A survey of current practice was also undertaken across a sample of local governments in Australia, as well as a number of road and transport agencies. The survey found that while asset management planning and long-term financial planning are coordinated across functions at local government level, there is some room for improvement, especially in terms of integration of these functions. Road and transport agencies were also found to not be under the same legal obligations as local government regarding AMPs, LTFPs and financial sustainability indicators but in some cases were working towards this level of co-operation. The use of financial sustainability indicators for asset management planning is generally extensive but the use of specific indicators, namely the asset sustainability ratio, asset consumption ratio and renewal funding ratio, needs to be better understood. The study found that the implications for asset management of the financial sustainability indicators are especially important given they are also dependent upon asset valuation, residual value, useful life and depreciation approaches adopted by the organisations involved. (Author/publisher)
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