Councils are going to have to shoulder the burden of the global financial crisis thanks to years of waste by former governments, former Victorian State Premier Jeff Kennett has told the Municipal Association of Victoria (MAV).

At the MAV annual conference in Melbourne last week, Mr Kennett told delegates that as the level of government closest to the community they would be dealing with the real impacts of the financial meltdown for years to come.

"The vast majority of Australians have never been asked, or had to be involved in such a period of economic downturn," My Kennett said.

"In one sense I don’t envy you, because being the government closest to the community you are going to find yourself in a tough position over the next five to ten years.

"Your conflict between some of the infrastructure/ community problems is going to be overidden by trying to deal with some of the real personal challenges that are faced by many communities, but increasingly rural Victoria."

Mr Kennett was addressing the conference in his role of chairman of the national depression initiative Beyondblue. In a broad-ranging speech he attacked the rise of government welfare and warned councils about embarking on private-puiblic partnerships (PPP).

"Some major infrastructure projects that were going to be PPP can not be afforded," Mr Kennett said, "because the private sector now hasn’t got access to credit and funds and they’re all being dropped very quickly, and the government has got this [financial crisis] to deal with for the future, and so the pincer movement will start."

Mr Kennett also launched a broadside against years of wasted opportunities to address issues such as education, health and infrastructure.

"Are we not the most wasteful society since the white settlers? Well, I think the answer is going to be an overwhelming ‘yes’," Mr Kennett said.

"We’ve just come to the end of the best 14 years of economic output that this country has ever witnessed, and yet, what have we done with all the wealth that we have generated?

"The reality is, we stand in the middle of this financial crisis, and the big issues haven’t been addressed."