Financing local government
ALGA’s analysis of key points in the 2015-16 Federal Budget from a local government perspective.
Financial Assistance Grants
- The 2015-16Budget maintains the system of payments to support local government, through Financial Assistance Grants (FAGs)
- In the 2015-16 financialyear, the Australian Government will allocate $2,289 billion in FAGs for local government services to the community. The freeze on indexation announced in the 2014-15 Budget remains in place, the impact of this freeze was estimated last year to be $925 million in lost FAGs until 2017-18. In 2017-18, indexation is projected to be re-instated, by which time, the annual funding base is estimated to be 13% lower than it should have been, without the impact of the freeze.
- FAGs continue to comprise two components: general purpose assistance grants; and untied local roads grants.
Table 1: Commonwealth funding for local government 2015-16 ($m)
General Purpose Assistance | 1,585.3 |
Untied Local Road Funding | 703.4 |
TOTAL LOCAL GOVERNMENT FUNDING | 2,288.7 |
Table 2: Total Financial Assistance Grants to local government 2014-15 to 2018-19 ($m)
2014-15 | 2015-16 | 2016-17 | 2017-18 | 2018-19 | |
General Purpose Assistance | 1,585.3 | 1,585.3 | 1,585.3 | 1,652.3 | 1,722.9 |
Untied Local Road Funding | 703.4 | 703.4 | 703.4 | 733.2 | 764.5 |
TOTAL FINANCIAL ASSISTANCE | 2,288.7 | 2,288.7 | 2,288.7 | 2,385.5 | 2,487.4 |
FAGs are increased annually, however, the indexation freeze applied by the Government in the 2014-15 Budget remains until 2017-18, by which time, councils are estimated to have forgone $925 million in projected FAGs payments.
Table 3: Financial Assistance Grants to local government by jurisdiction 2015-16 ($m)
NSW | VIC | QLD | WA | SA | TAS | ACT | NT | Total | |
General Purpose Assistance | 507.2 | 394.6 | 318.7 | 174.5 | 113.3 | 34.5 | 26.0 | 16.5 | 1,585.3 |
Untied Local Road Funding | 204.1 | 145.0 | 131.8 | 107.6 | 38.7 | 37.3 | 22.6 | 16.5 | 703.4 |
TOTAL FINANCIAL ASSISTANCE | 711.3 | 539.6 | 450.5 | 282.0 | 151.1 | 71.8 | 48.6 | 33.0 | 2,288.7 |
Posted 6 May, 2015