Councils call on Treasurer to deliver on promise in May budget

Local councils have called on the Federal Treasurer the Hon Scott Morrison MP to deliver on the Commonwealth’s promise to restore the indexation of Financial Assistance Grants (FAGs) payments in the 2017-18 Federal budget.

According to a pre-budget submission from local government peak body the Australian Local Government Association (ALGA), the Australian Government estimated that the three-year freeze on FAGs indexation introduced in the 2014-15 Federal budget stripped nearly half a billion dollars from council revenues over the period up to 2017-18.

Mayor David O’Loughlin, ALGA President, said that it is ultimately communities that felt the pain of this freeze which continues to have a significant impact on councils, particularly those in rural and remote areas.

“Financial Assistance Grants are an important untied payment to councils from the Australian Government which are invested in essential community infrastructure and services ranging from local roads to swimming pools,” he said.

“As a result of this freeze, councils and their communities are missing out on expected revenue that would have otherwise been used to maintain safe and reliable road networks, fix local community infrastructure and fund crucial community services such as parks, libraries and community amenities.

“Many councils have had to make some tough decisions over the past three years on where to cut back to adjust to the reduced revenue levels, with some forced to cut services in areas such as childcare, defer or reduce road works and reduce operating hours for libraries and public pools.

“It has been a particularly painful three years for rural and remote councils which remain highly dependent on FAGs funding to meet day-to-day service-delivery costs; funding certainty is critical for these communities.”

The 2016-17 Federal budget out-years signalled an expectation that annual indexation of FAGs would return from 2017-18.

“Although we welcome this indication, it does not completely guarantee an end to the freeze,” Mayor O’Loughlin said.

“We need certainty in the Federal budget this May that indexation will be restored to FAGs and that our local councils will have the resources necessary to provide the level of services that every Australian community deserves.”