The NSW Country Mayors Association (CMA) has called on the federal government and the opposition to commit to restoring fair funding for local government.
Chairman of the CMA, Rick Firman, said that federal governments of all persuasions have slowly but surely eroded the funding that is provided to local government.
“It is alarming that the annual Financial Assistance Grants provided to local government by the federal government have decreased from one per cent of federal taxation revenue in 1996 to just 0.5 per cent today,” Mayor Firman said.
Mayor Firman raised concerns that this falling revenue was a major contributing factor to the financial sustainability challenges that many councils in rural and regional New South Wales currently face.
“Declining commonwealth contributions, coupled with rate pegging in New South Wales and increasing operating costs are making it very difficult for councils, and particularly country councils, to continue to deliver services and infrastructure at the levels our communities need.”
CMA Deputy Chairman, Russell Fitzpatrick, said that insufficient funding from the federal government hits country communities in the hip pocket.
“The inadequate Financial Assistance Grants situation creates large rate rises across rural and regional New South Wales local government areas during a cost-of-living crisis, as councils struggle to remain financially sustainable,” Mayor Fitzpatrick said.
“While country councils know their communities are doing it tough, their operating costs have also risen much faster than their revenue over consecutive years. Special Rate Variations harm the relationship we have with our ratepayers, but they have become a necessity in New South Wales.
“Grants are over 70 per cent of the revenue of some rural New South Wales councils. Their rate base is stagnant. So, even rate hikes cannot help them much.”
The CMA has written to the Prime Minister, Anthony Albanese, and to both the Leader of the Opposition, Peter Dutton, and the Leader of the National Party, David Littleproud, requesting one-on-one meetings to discuss the issue. The Leaders have also been invited to address the 28 March meeting of CMA, which has the theme of financial sustainability.
Country-based councils in New South Wales face unique cost pressures, with many local government areas being the size of small European countries and being responsible for close to 1,500km of roads.
Mayor Firman explained that councils are required to deliver public services like administration, recreational facilities, pools, libraries and waste facilities in multiple locations in order to ensure equity of access, which increases the cost of council operations.
“In many of our 87 member council LGAs there is little or no public transport; therefore, it is almost impossible to consolidate service delivery in centralised locations to cut costs. Our board and our members are committed to ensuring that those who choose to live and work in country New South Wales have the services and infrastructure available that validates that choice. It’s all about equity,” Mayor Firman said.
“We are asking the Commonwealth and opposition to please – step up to the plate, to support our members in providing the services and infrastructure that our communities need and deserve. A commitment to return Financial Assistance Grants funding to 1996 levels would substantially improve financial sustainability not just for New South Wales councils but for local government across Australia.”
