Federal Budget Update

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. 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.  The Budget papers indicate that indexation of FAGs will be restored in 2017-18.