Media Release: Councils caution tying critical local government funding to housing outcomes
The Australian Local Government Association (ALGA) strongly rejects any idea of Financial Assistance Grants being tied to council housing performance, warning this would unfairly penalise communities for outcomes that are well beyond the control of local government.
The Productivity Commission’s interim report on housing supply regulation has indicated that it will be considering ‘carrots and sticks’ in its final report.
ALGA President Mayor Matt Burnett said these grants are the only untied federal funding councils receive, and they help keep essential local services running in every community across the country.
“Putting that funding at risk won’t build more homes. It will just make it harder for councils to maintain local roads, manage community facilities and deliver the services people rely on every day.”
Mayor Matt Burnett said councils across Australia were ready to keep working with all levels of government to support housing growth.
“The Productivity Commission is right to call out infrastructure as a key part of the housing solution,” Mayor Burnett said.
“The Government has already recognised this through the $2 billion Local Infrastructure Fund which will be used for local government and state utility enabling infrastructure.”
“Councils have been saying this for a long time – you can’t build more homes without the roads, water, drainage, parks and community infrastructure to support them.
“We also welcome the report recognising that planning approval alone does not automatically translate into new housing supply.”
Mayor Burnett said the report rightly acknowledged that housing delivery depends on a range of factors, including infrastructure funding, construction costs, workforce shortages, finance and project feasibility.
“We’ve heard for years that planning is the problem. But the reality is, the housing challenge is much bigger than that,” he said.
Mayor Burnett said local governments were not obstacles to housing delivery, but essential delivery partners.
“Local governments are on the ground every day planning for growth, approving development, maintaining local roads, managing community facilities and delivering the infrastructure and services communities rely on,” he said.
“That is why we are concerned about any move to expand state-led approval pathways if it means local communities have less say in how their towns, suburbs and regions grow.
“Council planning schemes exist for a reason. They reflect local priorities, local infrastructure capacity and the views of local communities.”
Mayor Burnett said ALGA was also concerned that changes to developer contributions could leave councils with infrastructure funding gaps at exactly the time they are being asked to support more housing.
“If councils are expected to support more housing, they need the funding and tools to deliver the infrastructure that makes housing liveable,” he said.
“Shifting or narrowing developer contributions could leave councils and communities carrying the cost of growth.”
“Taking money away from councils won’t build a single extra home. It will only make a tough challenge even harder.”