Councils ‘in crisis’ as funding fails them

Competitive grants programs, which have been used for pork-barrelling in the past, provide no long-term certainty for councils.

Local Government Minister Kristy McBain. Picture: Alex Ellinghausen

Local councils are “in crisis” with commonwealth funding not keeping up with demand and competitive grants programs, which have been used for pork-barrelling in the past, providing no long-term certainty.

Councils around the country are considering closing facilities such as pools and early childhood centres and outsourcing aged-care services.

Labor says it is working on creating “new equitable and transparent funding programs” to help communities that had missed out on their fair share of investment through the Building Better Regions Fund or the Urban Congestion Fund.

It follows scrutiny over how funding is allocated for such grant programs, with Labor ­accusing the then-Coalition ­government of pork-barrelling in an effort to win over marginal seats.

Since coming into government, Labor has indicated a nat­ional corruption watchdog would be given powers to investigate the allocation of grants and sniff out pork-barrelling retrospectively and into the future.

Numerous local councils have urged for the way funding is allocated to be reviewed, arguing the uncertainty of grant programs left communities unable to plan ahead.

It comes as a new economic report by the Australian Local Government Association shows Australia has the second lowest government expenditure as a percentage of GDP compared to other OECD countries, with funding reducing from 1.2 per cent of total commonwealth revenue in 1993-94 to 0.53 per cent in 2021-22

Minister for Regional Development and Local Government Kristy McBain said she had been in discussions with councils and was planning on making changes to funding programs.

“I know that financial sustainability for local governments is an ongoing concern, particularly for regional councils,” she told The Australian.

“I will … be working with my colleagues and across the local government sector to create new, equitable and transparent funding programs because we know that many parts of the country have missed out on their fair share of investment through the Building Better Regions Fund or the Urban Congestion Fund.

“I’ve spoken with dozens of mayors and councillors this week and disaster relief and resilience continues to be a major focus for councils across the councils.”