Twenty-four million dollars will be missing from the first quarter’s payment of vital grants to councils across Australia next week, a result of the Federal Government’s Budget cuts.
The decision in the 2014-15 Federal Budget to freeze indexation of the local government Financial Assistance Grants will cost councils $96m this year, $200m next year and more than $300m the year after. All councils will be hit, but the impact is expected to be greatest on smaller rural and remote councils which depend most on the grants.
The Financial Assistance Grants, provided each year by the Commonwealth to local governments to pay for vital community services and infrastructure, including roads, parks, swimming pools, libraries and childcare, are an important part of the Australia’s Federal system of government, seeking to ensure that all Australians, wherever they live, enjoy a basic standard of local services and infrastructure.
“These grants are essential for all communities and have been a consistent commitment by all Federal Governments for 40 years, but the decision of the Federal Government in its first Budget to wind back support will have an impact on every community”, said the president of the Australian Local Government Association, mayor Felicity-Ann Lewis.
“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.”
"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 the library will receive less funding."
“It is important that each council brings home to their local Federal Government representative the real impact of these cuts and the need to reverse this policy.”
ALGA has called for the freeze on indexation of the grants to be reversed and for the reduction in grants paid to councils to be restored.