Financing local government
ALGA’s analysis of key points in the 2016-17 Federal Budget from a local government perspective.
Financial Assistance Grants
- The 2016-17 Budget maintains the system of payments to support local government, through Financial Assistance Grants (FAGs).
- After strong advocacy to the Federal Government the Budget papers indicated that the freeze on indexation, that will cost councils $925 million by the end of financial year 2017-18, is expected to end, with indexation to be restored in 2017-18.
- In the 2016-17 year, the Australian Government will allocate $2.29 billion in FAGs for local government services to the community.
- FAGs continue to comprise two components: general purpose assistance grants; and untied local roads grants.
Table 1: Commonwealth funding for local government 2016-17 ($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 2015-16 to 2019-20 ($m)
2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | |
General Purpose Assistance | 792.5 | 1,585.3 | 1,649.5 | 1,714 | 1,783.9 |
Untied Local Road Funding | 351.7 | 703.4 | 731.9 | 760.5 | 791.6 |
TOTAL FINANCIAL ASSISTANCE | 1,144.2 | 2,288.7 | 2,381.4 | 2,474.5 | 2,575.4 |
FAGs are increased annually, based on an escalation factor determined by the Treasurer with reference to population growth and the consumer price index. Budget Paper 3 indicates 2016-17 will be the final year that the indexation of Financial Assistance Grants will be frozen.
Table 3: Financial Assistance Grants to local government by jurisdiction 2016-17 ($m)
NSW | VIC | QLD | WA | SA | TAS | ACT | NT | Total | |
General Purpose Assistance | 508.1 | 396.8 | 318.3 | 172.7 | 112.8 | 34.3 | 26.1 | 16.2 | 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 | 712.2 | 541.8 | 450.1 | 280.0 | 151.5 | 71.6 | 48.6 | 33.0 | 2,288.7 |
Posted 3 May, 2016