Opposition Leader Bill Shorten is calling on the Turnbull government to bring forward $620 million in funding for local councils to act as a de-facto stimulus package to drive infrastructure investment and create new jobs.
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Small rural and regional councils in particular need an urgent economic boost to fund much-needed maintenance and undertake new projects, Mr Shorten says.
"These communities need jobs and they need them now. This will provide local economies with a shot in the arm, which will mean more local jobs and more investment."
Mr Shorten's proposal would involve bringing forward Financial Assistance Grants funding from 2018-19 into next financial year. The money is already in the budget so the move would not worsen the deficit or require cuts in other areas.
Labor says the government has effectively ripped $1 billion from local government by imposing a three-year indexation freeze on the grants funding. Labor promised at the last election to end the indexation freeze this year.
"Local government needs the capacity to plan for the future and make strategic decisions about infrastructure and growing service priorities," Mr Shorten said.
"The government's cuts have meant local councils across Australia have been forced to reduce services and increase fees for important things like community care, library opening hours, waste transfer station operations, childcare and community kindergarten."
Any funding boost should be separate to assistance to communities hit by natural disasters, Mr Shorten said.
Australia has more than 500 local councils, which employ close to 200,000 people. The federal government has paid $48 billion to councils under the grants scheme since the 1970s, including nearly $2.3 billion this year.
The indexation freeze was announced as part of Tony Abbott's horror 2014 budget. There is speculation the Turnbull government will lift the freeze in next month's budget although no commitments have been made.
