It’s been a long three years since Tony Abbott and Joe Hockey handed down their notorious 2014 Federal budget.
Since then, the indexation freeze placed on local government Financial Assistance Grants (FAGs) has caused a lot of grief for councils, particularly in regional and rural areas.
These councils have no doubt been waiting patiently for this year’s budget to roll around in the hopes that their financial fog would be lifted. However, we’re not out of the woods just yet.
The indexation freeze was slated to be in place for just three years and restored at the end of 2017, but the Federal Government has given no certainty that this will be the case. The local government sector will have to wait until budget night to find out if indexation will be restored.
The Australian Local Government Association has been vocal on the issue – advocating at COAG and trying to mobilise individual local governments.
The Association has been running a series of case studies on their website that highlight how hard councils have been impacted.
For example Mayor of Balonne Shire discusses the
reality for his rural council in southern Queensland.
With a small rate base and stagnant population, plus the added economic pressure from drought conditions, the Shire relies on assistance from other levels of government. Financial Assistance Grants make up approximately 25 per cent of the Shire’s annual revenue.
The Shire has stated previously that the reduction is equivalent to losing two full time staff members, and puts significant strain on the ability to deliver services.
Stories like this are paralleled across the country.
Moreover, even if indexation is restored this year, the impact of the three-year freeze will still be felt into the future. As Local Government New South Wales (LGNSW) President Keith Rhoades discusses on the opposite page, it will mean a permanent base reduction of around 13 per cent to the funding.
Resources have been made available on ALGA’s dedicated campaign website (endthefreeze.com) to help councils state their case.
If your council or shire has been hurting, you would do well to visit the site, share your story and pen a letter to your local MP.
