Financing local government
ALGA’s analysis of key points in the 2015-16 Federal Budget from a local government perspective.
Financial Assistance Grants
- The 2017-18 Budget maintains the system of payments to support local government, through Financial Assistance Grants (FAGs).
- The indexation of FAGs will be restored in 2017-18.
- In the 2017-18 year, the Commonwealth Government will allocate $2.37 billion in FAGs for local government services to the community. Half of that allocation will paid in the 2016-17 year, however, it will be identified as 2017-18 funding.
- FAGs continue to comprise two components: general purpose assistance grants; and untied local roads grants.
- The supplementary payment to South Australia for local roads will be restored in 2017-18 and 2018-19 at $20 million per year, however, there is no funding beyond 2018-19.
Table 1: Commonwealth funding for local government 2017-18 ($m)
Cth funding 2017-18 | Cash in 2017-18 | |
General Purpose Assistance | 1,639.4 | 819.7 |
Untied Local Road Funding | 727.4 | 363.7 |
South Australian supplementary roads funding | 20.0 | 20.0 |
TOTAL LOCAL GOVERNMENT FUNDING | 2,386.8 | 1,203.4 |
Table 2: Total Financial Assistance Grants to local government 2016-17 to 2020-21 ($m)
2016-17 | 2017-18 | 2018-19 | 2019-20 | 2020-21 | |
General Purpose Assistance | 2,405.0 | 819.7 | 1,701.1 | 1,784.5 | 1,795.4 |
Untied Local Road Funding | 1,067.2 | 363.7 | 754.8 | 791.8 | 796.7 |
TOTAL FINANCIAL ASSISTANCE | 3,472.2 | 1,183.5 | 2,455.9 | 2,576.3 | 2,592.0 |
FAGs are increased annually, based on an escalation factor determined by the Treasurer with reference to population growth and the consumer price index. Half of the 2017-18 payments will be made in 2016-17, therefore the cash payments for those years will appear skewed in tables 2 and 3.
Table 3: Financial Assistance Grants to local government by jurisdiction 2017-18 ($m – cash)
NSW | VIC | QLD | WA | SA | TAS | ACT | NT | Total | |
General Purpose Assistance | 262.6 | 205.7 | 164.5 | 89.7 | 58.0 | 17.5 | 13.4 | 8.3 | 819.7 |
Untied Local Road Funding | 105.5 | 75.0 | 68.2 | 55.6 | 20.0 | 19.3 | 11.7 | 8.5 | 363.7 |
TOTAL FINANCIAL ASSISTANCE | 368.2 | 280.6 | 232.6 | 145.3 | 78.0 | 36.8 | 25.1 | 16.8 | 1,183.5 |
Posted 9 May, 2017