Rural councils' funding shortfall sparks federal call for change

Rural councils are "getting smashed from every angle" with claims Victoria ranks last in supporting remote areas. Here’s why.

Canberra needs to provide millions more in assistance to sparsely-populated rural councils with Spring Street unable to stump up the cash, Anne Webster sayas.

Last year, Regional Cities Victoria called for the Allan Government to push for the restoration of Financial Assistance Grants to at least one per cent of Commonwealth taxation revenue.

The opposition local government spokeswoman said the one per cent Commonwealth call was widely supported by mayors statewide.

“If you compare each state and their respective support for rural councils, the Victorian Government is bottom of the pack for its financial contribution to local government of remote and sparsely populated areas,” the Mallee National Party MP said.

“The Auditor-General’s August 2025 report found regional councils, particularly the smaller ones, are not sustainable into the future.

“It’s the density of urban councils — they’ve got a huge ratepayer base, multiple streams of revenue that smaller councils aren’t even close to achieving.

“Every shire I speak to across regional Victoria wants (federal) Financial Assistance Grants to at least one per cent but it does not appear at a federal level for that to occur.

“But there is a question over how state governments are divvying up that 0.5 per cent of Financial Assistance Grants being provided (by Canberra).”

Mallee MP Anne Webster.

Federal Local Government Minister Catherine King’s office was contacted by The Weekly Times for comment. Ms King’s office deferred questions to ministerial colleague Kristy McBain’s office, which did not respond in time for deadline.

Earlier this month, Buloke Shire mayor Alan Getley confirmed state and federal financial support to repair council infrastructure damaged in the 2022 floods had yet to materialise.

“We’re still chasing funding from the October 2022 floods — we’ve now hit the three year mark and nothing,” he said.

Rural Councils Victoria deputy chairwoman Kate Makin said municipal budgets were “getting smashed from every angle.”

“We’re at a crunch point, but this challenge has been growing for decades,” Mrs Makin said.

“On the ground this can mean service reductions and infrastructure delays.

“Targeted grants and funding schemes only go so far when councils are systemically underfunded.”

A spokesman for Victorian Local Government Minister Nick Staikos said: “This financial year, Victoria’s 40 regional and rural councils, which are home to 13 per cent of the population, will receive about 44 per cent of the total grants funding available through Local Government Victoria.

“This equates to about $366 million in grants and targeted funding, as recommended by the Victorian Local Government Grants Commission.”