In its recently launched federal election document, ALGA has called for the repair of federal funding to local government stating that the current funding arrangements for local government are no longer fit for purpose.
The Commonwealth Government’s funding to local government through Financial Assistance Grants (FAGs) is critically important. Untied in the hands of councils, the FAGs enable councils to provide a mix of services and infrastructure appropriate to their local circumstances and maintain the well-being of their communities. They help equalise the level of services across local governments nationally – particularly in rural, regional and remote areas – and they help fund the growth in demand for local government services in line with population growth.
ALGA has stated that the relative decline in core federal funding to local government has reduced the capacity of councils to develop and maintain services and infrastructure in their communities, which fuels the risk of reducing standards of living in those communities and across the nation.
FAGs were equal to around 1 per cent of Commonwealth taxation revenue in 1996. However, despite an annual growth rate in Australia’s Gross Domestic Product of an average 3.47% from 1960 until 2017, FAGs have declined by around 43% in relative terms over the past 20 years, and now amount to approximately 0.55% (2018) of Commonwealth tax revenue.
ALGA has called for the level of FAGs to be restored to at least 1 per cent of Commonwealth taxation revenue, which would see a $1.42 billion cumulative Gross Domestic Product benefit by year 3 and 4,000 new jobs.
Find out more about this and other federal election initiatives from ALGA at www.allpoliticsislocal.com.au