The Australian Local Government Association (ALGA) is calling on the Federal Government to honour its pre-election commitment to “fair increases” in Financial Assistance Grants to the nation’s councils.
Before last year’s election, Federal Labor committed to the “long-term financial sustainability of local government” through increases to grant allocations, including “fair increases” to Financial Assistance Grants*.
ALGA President, Linda Scott said many local governments rely on FA Grants to remain sustainable and urgently need an increase in this untied funding.
“Australian councils are facing significant financial challenges, especially in the wake of recent natural disasters,” President Scott said.
Restoring FA Grants to at least 1% of Commonwealth taxation revenue would be throwing councils a much-needed lifeline, she said.
“Councils only collect 3.5% of national taxation and are heavily reliant on funding from other levels of government.”
“FA Grants have declined from 1% of Commonwealth taxation revenue in 1996 to just 0.52% today, and this is making it harder for us to provide the local facilities and services our communities rely on.
“The Government campaigned on fair increases to FA Grants, and we want to see the first round of increases when they deliver their first full Budget in May this year.”
Recent research, commissioned by the Association, shows FA Grants make up more than 20% of annual operating expenditure for around one in four Australian councils.
* Data from page 132 of the ALP’s 2021 National Platform.