Media Release: Time for action as the Government wraps up its inquiry into local government funding and budget needs

After two and a half years of evidence, the Federal Government yesterday wrapped up hearings in its inquiry into the financial sustainability of local government, locking in years of testimony from councils, local government associations, Commonwealth departments, experts and other stakeholders from across Australia.

ALGA has consistently welcomed the House of Representatives Standing Committee on Regional Development, Infrastructure and Transport’s Inquiry into Local Government Funding and Fiscal Sustainability as an important opportunity to address the growing financial pressures facing councils and to build a stronger, more sustainable funding partnership between local government and the Commonwealth.

However ALGA President Mayor Matt Burnett said that after more than two years of hearing from councils about the growing pressures they faced, there was little relief for local government.

“The key issues for councils remain the same: our councils need strong support as their communities face multiple challenges from housing pressures to rising cost of living to natural disasters.

“We need to see solid recommendations from the Committee and strong action from the Federal Government to ensure the grassroots level of government in this nation is not left behind.

“The Labor Party’s promises toward a Federation Compact with local government present a strong opportunity to act on the concerns raised in the Inquiry.

“And it needs to happen now. Councils can’t wait years for the Government to act on the findings of the Inquiry.”

Mayor Burnett said councils were watching today, in anticipation of the Committee’s findings.

“We call on all levels of government and all spheres of politics to take seriously the needs of local government and the important role they play in our communities.”

Appearing before the inquiry in June 2024 and July 2026, ALGA highlighted the widening gap between the responsibilities councils are being asked to carry and the funding available to meet them. Councils are managing growing community expectations, ageing infrastructure, disaster recovery, housing and planning pressures, workforce shortages and rising service delivery costs, while facing significant constraints on their revenue and funding certainty.

ALGA has consistently called for more reliable funding streams from the Commonwealth to allow local governments to meet community needs.

Over the course of the inquiry, the Committee has heard evidence across a broad range of issues affecting council financial sustainability. These have included the complexity of Commonwealth funding programs and barriers to accessing grants; the adequacy, effectiveness and coordination of existing funding mechanisms; the growing responsibilities being taken on by councils without corresponding increases in resources; and the particular capacity and funding challenges facing regional, rural, remote and Indigenous communities.

The Committee has also examined the increasing financial impact of climate change, natural disasters and infrastructure renewal on councils, as well as questions about whether Commonwealth funding arrangements adequately reflect the very different needs and revenue-raising capacities of communities across Australia.

These issues reinforce ALGA’s long-standing position that sustainable local government requires more than short-term or competitive grants. Councils need a funding framework that provides certainty, flexibility and equity, and recognises the essential role local government plays in delivering services, infrastructure and national priorities in every Australian community.