There was some good news and some disappointment in this week's Budget for local government. The Government met its commitment to double the funding for the Roads to Recovery programme and provide additional Black Spots funding in 2015-16 but this was offset by the continuing freeze on the indexation of the Financial Assistance Grants (FAGs).
The doubling of Roads to Recovery is an important boost to all councils who need help maintaining the first and last miles of our transport network, on which the nation relies to move goods and people. This doubling will see an extra $350 million in Roads to Recovery funding provided to councils next year and, in addition, Black Spots funding will increase from $60 million to $160 million.
The Budget also included the continuation of funding for regional and remote aerodromes under the Regional Aviation Access Programme with an extra $40 million to upgrade airstrips and boost air services for remote communities.
I was disappointed, however, that this much needed increase in investment in local infrastructure takes place against the backdrop of a continued decline in our core funding because of the ongoing freeze on the indexation of the FAGs. During the three years of the freeze the Government will have reduced the base of the FAGs grants by an estimated 13% and, by 2017-18 when indexation is restored, around $925 million will have been foregone by communities around Australia.
ALGA has strongly advocated for the immediate restoration of indexation. The Budget papers indicate that indexation of FAGs will be restored in 2017-18 but by then the impact on many councils will be substantial. Cootamundra Shire Council in NSW for instance will receive around $8 million in FAGs during the freeze period. However, this is around $1 million less than it would have received without the freeze. Council has reported that this equates to a loss of almost 43% of Council's roads renewal budget in 2017/18 and beyond.
Local government across the country is united in its determination to see indexation restored as soon as possible and ALGA is working with state and territory associations and councils to make sure that Federal MPs fully understand the impacts of the freeze in their electorates.
Our objective must be to see an end to the freeze in 2016-17. Doing so will limit the reduction in the base and restore around $200 million in FAGs funding to our communities.
This is important for every Australian community and for the financial sustainability of our councils. We must continue to build momentum for the early restoration of indexation and ensure that the Federal Government and MPs are fully aware of the consequences for local communities.
Mayor Troy PIckard