Bundaberg and Fraser Coast councils fear rate rise as funding cut

Both the Bundaberg and Fraser Coast councils are reeling from the slashing of financial assistance grants after a bizarre change which puts the regions in the same category as Brisbane despite wildly different socio-economic stats.

Bundaberg and Fraser Coast council Mayors said rates could rise and community services reduced after the Financial Assistance Grants they receive from the Australian Government were cut by about $2 million each.

Two councils in the Hinkler electorate fear rates may have to rise as well as reduce community services after the financial assistance grants they receive from the Australian Government were cut by about $2 million each.

A new formula being used by the Queensland Local Government Grants Commission to distribute Financial Assistance Grants has put Bundaberg and the Fraser Coast councils in the same bracket as councils like Brisbane, Gold Coast and Cairns.

Bundaberg and Fraser Coast Mayors Jack Dempsey and George Seymour described the new formula as “unfair, unjust and inequitable”.

Mr Seymour said Bundaberg and the Fraser Coast weren’t alone with the changes also affecting Rockhampton Regional Council and Toowoomba Regional Council.

“With 81 per cent of the tax collected in Australia going to the Federal Government, 16 per cent to State Governments and only three per cent going to local governments, Councils rely on grants like these to deliver the services our local communities need and deserve,” he said.

“The new formula the Grants Commission is now using puts our two councils in the same bracket as councils like Brisbane, Cairns and the Gold Coast and fails to take into account the high level of socio-economic disadvantage in Hinkler.

“Bundaberg and the Fraser Coast are now placed in the minimum grant group despite the fact we have among the highest levels of unemployment in the country, more people on age pensions, more people with disabilities and a much lower median weekly household income.

“We simply don’t have the same ‘capacity to pay’ as our counterparts in metropolitan areas as the Grants Commission has claimed.”

Bundaberg Regional Council CEO Steve Johnston said the cuts would be even deeper after the 2022-23 financial year, and would inevitably impact adversely on community services and infrastructure.

Bundaberg’s allocation reduces by almost 75 per cent, spread equally across three financial years.

Mr Johnston said the high level of socio-economic disadvantage in Hinkler hadn’t been taken into account.

“We’re above the national average for youth unemployment, disability and seniors,” he said.

“A quarter of Bundaberg’s residential ratepayers receive a pensioner discount, which reduces our revenue-raising capacity.

“Pensioners, residents and small businesses in the Bundaberg Region will have much needed federal funds diverted to subsidise services elsewhere.”

“The Australian Local Government Association has a policy position that the Federal Government should restore financial assistance grants to one per cent of Commonwealth taxation revenue,” he said.

Mr Johnston said the high level of disadvantage in the Bundaberg Region included:

• 10.8 per cent of the working age population is on Job Seeker, compared to 6.7% for Queensland in October 2021;

• The Bundaberg Region unemployment rate was 7.1 per cent in October 2021, according to the ABS monthly labour force survey, compared with 4.9 per cent for Queensland;

• Labour market participation was only 48.1 per cent in October 2021 compared with 66.2 per cent for Queensland;

• In Bundaberg, 38.1 per cent of households earn less than $501 per week, compared with 25 per cent for Queensland;

• During 2016, 7723 people (or 8.3 per cent of the population) in the Bundaberg Region reported needing help in their day-to-day lives due to a disability. This was up from 7.2 per cent in 2011. The numbers needing support are higher than regional Queensland at 5.5 per cent and Queensland as a whole, 5.2 per cent.

A spokesman for the Department of Local Government said the responsibility for allocation the Commonwealth Government’s Financial Assistance Grant to councils falls with the independent Queensland Local Government Grants Commission.

“The Queensland Government is committed to advocating with the Commonwealth Government for a better funding deal for Queensland councils from the Financial Assistance Grant,” the spokesman said.

“It has been approximately ten years since the Commission’s last review of the methodology and decisions about changes to the methodology are the responsibility of the Commission.

“The need for a review of the methodology was supported through feedback received by the Commission from Queensland councils.

“It’s also in line with a resolution of the 2020 Local Government Association of Queensland Annual Conference.

“The Commission’s review focused on considering if there is a more equitable distribution for the Financial Assistance Grant.”

Originally published as Bundaberg and Fraser Coast councils fear rate rise as funding cut