Local government budgets hit by federal assistance freeze

Bega Valley Shire Council general manager Leanne Barnes.

Bega Valley Shire Council general manager Leanne Barnes.

BEGA Valley Shire Council general manager Leanne Barnes says changes to Federal Assistance Grants in the federal budget present a “challenge” to local government.

The indexation of Financial Assistance Grants has been frozen for the next three years, meaning the grants will not be increased in line with CPI and population increases.

According to the Australian Local Government Association, this means councils will miss out on an expected $96million increase in Financial Assistance Grants for the provision of essential local services and infrastructure in local communities.

Bega Valley Shire Council, which put its own draft 2014/15 budget on public exhibition last week, is assessing the impacts of this freeze.

“The federal budget presents a challenge for local government through its plan to freeze incremental increases in Financial Assistance Grants,” BVSC general manager Leanne Barnes said.

“If adopted, this will impact on budgets in all local government areas, and we are currently viewing the documents in great detail to determine the effect of this and other budgetary measures on Bega Valley Shire Council’s bottom line and provision of services.

“Prudent financial management will make all the difference when faced with a reduced flow of federal funding, and it’s worth remembering that Bega Valley Shire Council has been independently assessed by the NSW Treasury as being in a good place in terms of financial stability.

“We will in due course provide full details to the community on the challenges and opportunities that come from the federal budget.

“These of course must be viewed holistically, as the flow on effect from funding cuts and spending priorities will be felt by the entire community,” Ms Barnes said

President of the Australian Local Government Association (ALGA) Felicity-Ann Lewis said councils will have to re-evaluate what services and infrastructure they provide if federal funding remains static for the next three years.

“Decisions will be made at a local level about how these funds are used, and clearly some services will suffer,” Ms Lewis said.

"These grants are used to maintain a great range of infrastructure including local roads, bridges, parks, swimming pools, libraries and community halls as well as services to the young, the elderly and community groups of all kinds.” 

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