Established in July 2006, FiscalStar's sole purpose is to develop and implement a system of financial sustainability ratings applying to local government authorities in Australia and New Zealand.

FiscalStar is an initiative of its principals, based in part on the (peripheral) finding of some recent State-based financial sustainability inquiries in favour of a role for external monitoring. Feedback received from ratepayers also confirms that demand exists for regular publication of consistent and comparable assessments of council finances.

FiscalStar funds its activities solely by advising external stakeholder groups such as regulators (State departments or offices of local government), debt providers and ratepayer organisations.

FiscalStar is:

• independent: it does not audit or advise Councils
• expert: its personnel have direct - and unmatched - experience in assessing the comparative performance of governments, at the national, State/regional and local levels.

FiscalStar’s analysis is a desk-top one. It is undertaken primarily using publicly-available council data. The assessments made look for warning signs based on well-tested, available metrics and the current level of public disclosure.

FiscalStar's ratings seek to distil – into an easily understandable form from the complexities of audited financial statements and notes – a council’s present financial and infrastructure conditions and the implications from the ratepayer perspective of any departure from prudent and responsible conditions. As such, FiscalStar provides an independent perspective on a council’s present financial and infrastructure conditions.

FiscalStar’s opinions do not provide policy advice to councillors or their management teams. Instead, FiscalStar’s mission at the local government level is to foster discussion between external monitors and local government regarding the meaning and measurement of financial sustainability, and to increase the incentives for associated improvements over time in local government financial reporting and governance.

Only one ratings service is now provided by FiscalStar, namely a current rating, which is provided automatically and free of charge.

FiscalStar applies two types of ratings scales:

• a financial sustainability scale, which indicates whether a council's existing policy settings are financially 'sustainable', 'vulnerable' or 'unsustainable' 
• a star ratings scale, which differentiates between council financial performance within -- as well as across -- the financial sustainability scale, by assigning up to a maximum of five stars.

Explanations of FiscalStar's ratings scales and ratings assessment methodology are provided on the "Technical" pages on this website.