The key is to allow some market forces into the equation and get rid of this silly idea that only the Federal Government can be trusted to provide safe air traffic control.
In just about every country in the world, the government in some shape or form provides ATC. There are private contract ATC in a lot of smaller towers in the USA, but even then the FAA has it's fingers pretty deep in that pie, ie it pays the contractor to provide ATC at that location on its behalf as long as the cost/benefits continue to stack up. If the FAA needs to save money, TWRs get closed. Not many (if any) municipalities take over running and manning them (if they are even allowed to) in the land of the free if the government stops paying. What makes you think local councils in Australia will? They do not even want to provide a UNICOM.