That's as true of local councils as it is of households.

When income is reliable and plentiful it's no problem for councils to spend the bounty. From original core functions many branches grow, all employing more people and providing new services to soak up the available cash.

It's when the income starts contracting that things get difficult.

Those in charge of council budgets face the challenge of keeping the ledger balanced by either cutting expenses to suit the reduced cash-flow or by finding ways of making more money.

In its latest plan to return its budget to sustainability, Lake Macquarie City Council is examining both methods.

Mayor Greg Piper has stated that about 10 per cent of the council's budget must be cut, warning that councillors will have to make some "courageous decisions".

Judging from the proposed measures so far published, Cr Piper is right.

While some cost-cutting proposals are likely to be relatively uncontroversial - eliminating duplication and improving efficiency, for example - others are bound to cause an outcry.

Paid car parking, long a handy milking cow for neighbouring Newcastle, will be resisted by many Lake residents and businesses alike. That the council can see the money-making potential of the proposal is clear, however, from the suggestion that it might hire extra staff to levy and collect the parking fines that will become available.

The council is also taking a leaf from the book of the NSW Government, hunting for land and other assets it can sell. As usual, parkland and open space stand out as the easiest and most profitable pickings, along with community facilities such as halls and meeting centres.

This is a path certain to be fraught with controversy, especially since the budgetary benefits of asset sales usually tend to be limited only to a single financial year.

Careful asset sales programs can usefully reduce accumulated debt and cut interest payments, but they rarely alter the underlying balance of income and expenditure. Badly handled, they merely impoverish communities by divesting useful land and facilities while deferring the real problem of balancing the budget.