Councils win as Financial Assistance Grants indexation restored in Federal budget

Councils have applauded the Australian Government’s announcement in today’s budget to restore indexation to Financial Assistance Grants (FAGs) from 1 July 2017 as promised following a tough three-year freeze.

According to the Government’s own estimates, its 2014 budget move to freeze indexation to FAGs cost local communities more than $600 million worth of services and infrastructure over the three years, with the biggest impact felt by councils in regional and remote Australia.

Mayor Damien Ryan, Vice President of the Australian Local Government Association (ALGA), welcomed the Government’s decision to restore the indexation and said councils could now begin to pick up the pieces.

“Financial Assistance Grants are an important untied payment that councils invest in providing better infrastructure and better services for our local communities,” Mayor Ryan said.

“By restoring indexation to this important payment, the Government is honouring its commitment to communities to ensure that, as far as possible, every citizen regardless of where they live can have equitable access to municipal services.

“However, there is still a long road ahead before councils recover from the freeze as it permanently reduced the base level of the Financial Assistance Grants payments.”

ALGA also welcomed the Government’s decision to provide $40 million over two years in supplementary road funding for South Australia.

“We’re pleased that the Government heard our calls, and the calls of the Local Government Association of South Australia, for fairer supplementary road funding for South Australia which was pulled in 2014-15,” Mayor Ryan said.

“This funding is immensely important to helping South Australian councils upgrade and maintain their local road networks, although a question still remains over the future of the funding beyond 2018-19.”

The local government perspective on the 2017-18 Federal budget can be accessed on the ALGA website.