Griffith City Council joins calls to Federal Goverment to halt decision to freeze indexation on Financial Assistance Grants
Friday June 20, 2014
Griffith City Council has joined other councils from across Australia in a vote to call on the Commonwealth Government to reverse its decision in the 2014 Federal Budget to freeze indexation on Financial Assistance Grants (FAGs) for at least the next three years.
FAGs provide core funding for grass roots services like parks and gardens maintenance, drainage, roads, and community services such as Meals-On-Wheels, and theatres and libraries run by councils. The effect of the freeze means that previous automatic indexation increases that were built into the scheme to account for inflation and population increases will be stopped, which is certain to hit more than 560 councils, shires, municipalities and cities.
Almost 900 delegates at the 2014 Australian Local Government Association's (ALGA) 20th National General Assembly in Canberra this week supported an urgent motion moved from the floor on Monday. Delegates called for indexation of FAGs in line with CPI and population growth to be restored immediately by the Commonwealth.
The Australian Government has provided over $41 billion in Financial Assistance Grants to local government from 1974-1975 to 2013–14.The Government’s announcement regarding the Financial Assistance Grants indexation freeze will mean a cut of $925 million in revenue to local governments across Australia by 2017-18.
This is not a sustainable reduction of local government funding, according to Griffith City Mayor John Dal Broi, who attended the National General Assembly with Griffith City Council General Manager Brett Stonestreet.
“Whilst Griffith will retain $4.7 million in Financial Assistance Grants funding for the 2014-2015 financial year, we will lose $314,000 due to the indexation freeze,” Councillor Dal Broi said.
“This reduction means Council will be significantly impacted in its ability to meet the increase in inflation and population as well as growing costs of material and labour to provide the services and maintain infrastructure provided by this funding,” he added.
Griffith City Council General Manager Brett Stonestreet said Council has revised its forward financial planning based on the indexation freeze.
“We have estimated an overall reduction of $17 million from the FAG funding stream over the next 10 years based on the indexation freeze and accordingly we have taken a more conservative approach in budgeting for this funding over the same period,” Mr Stonestreet said.
“Financial Assistance Grants to local government from the Commonwealth have also continually eroded since their introduction in the 1970s from more than 1% of the tax revenue at that time to about 0.6% today. Unless this slide in grant revenue is addressed, services in local communities will certainly suffer,” Mr Stonestreet added.
ALGA President and Chair of the National General Assembly Mayo Felicity-ann Lewis said Financial Assistance Grants are of vital importance to local government and help ensure the provision of local services available to every community across Australia.
For more information about Financial Assistance Grants, please visit http://www.regional.gov.au/local/assistance/. For more information about the Australian Local Government Association, please visit http://alga.asn.au/.
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