Australia probably has one too many levels of government. State Governments are completely expendable in my view. But given we couldn’t agree to change the name of the Governor General a few years back, the likelihood of a wholesale rewrite of the constitution getting up is not even remote.
The next best thing would be to just get them off the critical path. In Australia all the money is tipped in at the top of the system. The federal level ended up with all the growth taxes so they invariably have the money. All the work gets done at the local government level so the money has to get from Canberra to your community.
The most inefficient way for that to happen is to route it through state government. But a little while ago it was decided that for Canberra to make grants to Councils directly was in many cases a breach of the Constitution (Pape v Commissioner of Taxation 2009). The federal government is only allowed to do the things the States agreed they could do in 1901. Local government is only allowed to do the things each State decided they should do in their local government Act.
Fortunately, the panel setup to consider whether local government should be recognised in the Constitution seem to have got to the nub of the matter - the money. I’ve only managed to skim the Summary and Conclusions but it seems the panel are in agreement that direct funding of Councils by the federal government is in the national best interest. The only question seems to be whether the community would support this change to the Constitution in a referendum.
This article in the MAV Bulletin gives a brief overview of how using digital signatures allowed Yarra Ranges to drop their contracts turnaround from weeks to hours. Presumably it also saves a lot of scanning to get the documents into the records system!