By Cr Linda Scott, President of the Australian Local Government Association
Australia is in the midst of a cost-of-living crisis, as the rising costs of housing, food, transport and utilities are all being felt by households across the country. As the closest government to communities, councils are stepping up to provide relief, providing free and low-cost services and programs through libraries and community centres, as well as direct support to vulnerable residents.
However, we can’t continue to provide these extra services without sustainable funding, and that’s why we are calling on the Federal Government to honour its commitment of delivering “fair increases” to federal Financial Assistance Grants. In the lead up to the 2022 election, Federal Labor committed to supporting the “long-term financial sustainability of local government” through increases to grant allocations, including “fair increases” to Financial Assistance Grants. But unfortunately, almost two years later, councils are still waiting!
Our number one focus in the May Budget is restoring Financial Assistance Grants to at least one per cent of Commonwealth taxation revenue, and I recently met with the Treasurer, senior Government Ministers, Shadow Ministers and independents in Canberra to highlight this urgent need for more support.
Disappointingly, FA Grants have declined from one per cent of Commonwealth taxation revenue in 1996 to just 0.5 per cent today. Our research shows local governments’ share of Gross Domestic Product is amongst the lowest of comparable nations, and expenditure per capita by councils has flatlined over the past decade, while state, territory and commonwealth spending continues to rise.
Restoring untied Financial Assistance Grants to at least one per cent of Commonwealth taxation revenue must be an urgent priority for this Government and would deliver tangible benefits for every Australian community. We are also asking for a once-off $3 billion payment to councils to address the historical practice of paying FA Grants in the previous financial year.
For 15 years councils have received these advance payments as economic stimulus to address the impacts of COVID, natural disasters, and the Global Financial Crisis. However, many local governments are playing a constant game of catch-up on the $3 billion worth of funds and we need to reset the payment cycle. Providing an additional once-off allocation of Financial Assistance Grants equal to one year’s payments will address the bring-forward and meet the Government’s commitment to fair increases.
Another key issue on ALGA’s agenda is empowering councils to effectively address the nation’s housing crisis. We are advocating for the Government’s new Housing Support Program to be increased from $500 million to $750 million to invest in the local infrastructure necessary for healthy and connected communities.
We simply can’t build more houses – we also need to create more parks, libraries, playgrounds, recreation centres and swimming pools – to create more liveable communities. We are committed to working with the Government on its housing ambitious targets, but it’s crucial residents in new developments have access to the same health, employment, education and recreation opportunities that many people take for granted.
Finally, other priorities on our 2024-25 Budget wish list include funding for disaster recovery, emissions reduction, waste management, climate change adaptation and improving community infrastructure. Councils have a key role to play in building a stronger and more resilient nation and we look forward to working with the Commonwealth, and our state and territory governments, to deliver place-based solutions across the country.
Cr Linda Scott is President of the Australian Local Government Association, the national voice of local government, representing 537 councils across the country.
