Local government was dismayed by the decision in last year’s Budget to pause the indexation of Financial Assistance Grants (FAGs) for three years.
This decision will see FAGs frozen at their current level until 2017-18 and will result in a permanent reduction in the FAGs base by about 13 per cent. ALGA is calling on the Australian Government to immediately restore the indexation of FAGs in the 2015-16 Budget and to consider the adequacy of the quantum of FAGs and the indexation methodology in the future.
ALGA acknowledges that there will be a one-off doubling of Roads to Recovery funding in 2015-16. This will be welcomed by councils but it will be offset by the foregone indexation of FAGs.
The doubling of Roads to Recovery funding recognises the challenge faced by councils and ALGA believes that the funding for Roads to Recovery and the bridges renewal program should be permanently doubled in the future as circumstances permit.