THE Australian Local Government Association (ALGA) last week said local governments and their communities have not been spared the impacts of the Federal Budget, with the indexation of Financial Assistance Grants (FAGs) in line with CPI and population increases to be frozen for the next three years.
According to ALGA, the changes mean that in the first year, councils will miss out on an expected $96 million increase in FAGs for the provision of local services and infrastructure in local communities. This figure is expected to rise to $200 million in 2015-16 and $321 million in 2017-18, with a total of $925 million expected to be lost over the next four years.
The ALGA described the local government grants, which are paid through the states and untied in the hands of individual councils, as absolutely essential to allow local communities across Australia to provide a reasonable level of service and infrastructure to local residents.
"Through these grants, the Australian Government makes a vital contribution to the lives of every Australian" said ALGA President, Felicity-ann Lewis.
"Councils will have to re-evaluate what services and infrastructure they can provide as the level of funding remains static for the next three years.
"These grants are used to maintain a great range of infrastructure including local roads, bridges, parks, swimming pools, libraries and community halls as well as services to the young, the elderly and community groups of all kinds. Decisions will be made at a local level about how these funds are used, and clearly some services will suffer."
Cr Lewis said the value of the grants will be declining each year, and without any increase to reflect population and CPI growth, the ability of councils to meet community needs will fall.
The Federal Government has remained committed to Roads to Recovery (R2R) funding at $350 million per annum but has flagged that an additional $350 million will be provided in R2R funding in 2015-16 from the Asset Recycling program once established. A new $300 million program for the renewal of bridges, to be spread over five years, will also begin in 2014-15.
Cr Lewis welcomed the new Bridges Renewal program, an election promise of the Coalition, as an indication that local infrastructure will not be forgotten by the government, which has made much of its major infrastructure investment.
"Local Government is responsible for 80% of the nation's roads by length and while investment in major transport infrastructure is important, we cannot afford to forget that almost every journey, whether by car or truck, begins and ends on local roads," Cr Lewis said.
"Councils need help to maintain the first and last mile of our transport network, on which the nation relies for the movement of goods and people."