Grants freeze sets in

Article image - Grants freeze sets in

Local Governments across Australia are beginning to feel the pinch as the freeze on Financial Assistance Grants (FAGs) that was announced in the federal budget sets in.

The Australian Local Government Association has announced that $24 million of expected funding has not been paid nation–wide after the freeze on the indexation of Financial Assistance Grants has come into effect.


“I am very concerned about the implications for services and infrastructure in local communities and these impacts will just get worse as the cumulative impact of the reduction in the grants grows every quarter and every year from now on,” said President of the Australian Local Government Association, Mayor Felicity-Ann Lewis.


“These grants are essential for all communities and have been a consistent commitment by all Federal Governments for 40 years, but the decision of this Federal Government in its first Budget to wind back support will have an impact on every community.


“Councils are trying to work out how to manage their budgets as a result of this decision.


“Many have already said road maintenance and other vital community services like parks, swimming pools and libraries will receive less funding.”


Local Government Associations Australia-wide are announcing the impact that the freeze is having on the councils they represent.


Western Australia Local Government Association (WALGA) President Mayor Troy Pickard, said the freeze is costing Western Australian communities over $50 million.


“WA Local Governments have been trying to address a backlog of infrastructure projects totalling $1.6 billion for several years now.


“Decisions like this make it virtually impossible for Councils to catch up and places extreme pressure on the State Government to step up and fill the gap.”
In Victoria, the Municipal Association of Victoria have announced that statewide $5.65 million dollars is missing from the first round of quarterly payments.


“We have known since May that these cuts were coming, and some councils have had to take extreme measures, like scaling back road maintenance and other council services, to make up for the shortfall.


“In rural areas the grants provide up to 31 percent of total funding, so rural communities will suffer a massive blow.


“The MAV has been working hard with councils to actively voice our opposition against the freeze, and last month (July) we established a Financial Assistance Grants taskforce.


“The taskforce includes councillors and officers from rural and metropolitan councils, and aims to guide the MAV’s response to the cuts.


“The MAV will continue a push against the freeze, in the hope that it will be revoked.”


Burdekin Shire Council in Queensland has announced that their individual cuts total $43,821.


Mayor Bill Lowis said that this, combined with a static ratepayer base and rising compliance, energy and insurance costs, is placing a heavy financial strain on Council.


“This is a huge blow to Council’s budget as we had completed our budget based on the assumption our grants would freeze, not decrease.


“This is money Council will now have to find to plug that gap in funding.


“We wholly support the call to reverse the freeze and restore indexation of FAGs, so councils, such as ours, don’t have to rely so heavily on our ratepayers.”


Tasmania has seen a slight increase in their Financial Assistance Grant pool from $72,371,743 in the 2013–14 financial year, to a total cash payment of $72,613,290.


The Local Government Association of South Australia (LGASA) has welcomed the $153.5 million of Financial Assistance grants released to South Australia, however regrets that the funding round didn’t also come with a signal from the Government that it would reconsider removing the freeze on indexation.


“We can’t get away from the fact that Councils and therefore their communities, will lose $6 million in real terms this year, approximately $13 million in 2015-16 and up to $20 million by 2016-17 and each year thereafter if the Government continues its freeze on indexation,” said LGASA President, Mayor David O’Loughlin.


Despite the funding cuts, the LGASA has looked to driving the local economy and cut red tape, some of the actions identified in the Shaping the Future of South Australia report.


Mayor O’Loughlin said Local Government is already active in a number of the top ten identified areas highlighted in the report released by the Committee for Economic Development (CEDA).


“South Australia’s regional Councils already contribute funding to Regional Development Australia, to actively seek and support economic development opportunities throughout South Australia.


“Councils are already working hard to reduce the burden of regulation to streamline service provision to their communities and the LGA has commissioned a report on red tape reduction in Local Government.”