Councils ask Anthony Albanese for one-off $3bn payment

Local governments want a one-off payment of $3bn and warn that failure to provide ‘fair increases’ to financial assistance grants risks vital public services.

Australian Local Government Association president Linda Scott.

The Albanese government stands accused of not honouring its commitment to deliver “fair increases” in financial assistance grants to the nation’s 537 local governments, with councils asking for billions in extra funding to help support community services during a cost-of-living crisis.

The Australian Local Government Association has asked the government to restore financial assistance grants to at least 1 per cent of Commonwealth taxation revenue as “an urgent priority”, in addition to a one-off payment of $3bn.

ALGA president Linda Scott – a Labor councillor on the City of Sydney Council and a former deputy lord mayor – told The Australian that financial assistance grants had declined from 1 per cent of Commonwealth taxation revenue in 1996 to just 0.5 per in 2024.

“Local governments’ share of Gross Domestic Product is among the lowest of comparable nations, and expenditure per capita by councils has flatlined over the past decade, while state, territory and commonwealth spending has continued to rise,” she said.

“Whether it’s stepping up to provide affordable housing solutions, or running more free and low-cost community programs, we are committed to addressing Australia’s cost-of-living crisis but we can’t keep doing more with less.”

The ALGA is also asking for an additional one-off payment of $3 billion to help councils on to a more stable financial footing. Ms Scott said since 2009-10 the government had consistently prepaid either part or all of the annual financial assistance grants to councils in the previous financial year.

In 2023-24, 100 per cent of financial assistance grants were prepaid to councils early (in June 2023). While this looked good in theory, the ALGA warned many councils also spent the money early because they have been asked to use it as a stimulus to address issues like the COVID-19 pandemic, natural disasters or the global financial crisis.

This was particularly the case for smaller councils more reliant on base federal funding to remain sustainable.

Ms Scott said the payment cycle needed to be reset so the money was provided to councils in the actual year.

“We are now playing a constant game of catch-up on the $3 billion worth of funds and need to reset the payment cycle,” she said. “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.”

ALIA president Jane Cowell. Picture: Alistair Brightman / Fraser Coast Chronicle

In its 2021 pre-election national platform, the Labor Party said that in government it would “focus on the long-term financial sustainability of local government through increases to

grant allocations, including fair increases to financial assistance grants”.

The ALGA is warning that a failure to provide the “fair increases” will diminish the quality of vital public services such as those provided by libraries. The cost of living crisis has meant libraries have been increasingly loaning out physical items such as kitchen equipment or home energy tool kits.

Australian Library and Information Association president Jane Cowell told The Australian that “public libraries have always provided essential community services and support”.

“Libraries are also increasingly being called on to provide more support to communities, such as lending collections of physical items needed by the community,” she said.

“For example, in regional South Australia, Mt Gambier Library launched their Library of Things in mid-2023, aimed at easing cost of living pressures and reducing waste.

“In order for public libraries to respond to this increase in demand, secure and sustainable funding is needed at the local level.”

Local Government Minister Kristy McBain said the Albanese government was “ rolling out record funding “ to support community projects.

“We have listened to the sector and significantly increased commonwealth road funding programs – while establishing new, transparent grant programs across portfolios in consultation with the sector,” Ms McBain said.

“We will continue to work closely with the sector.”