Bega Valley Shire Mayor Kristy McBain has called for an end to a federal government freeze on the indexation of Federal Financial Assistance Grants.
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Cr Kristy McBain said the freeze has created a “significant impact” on council’s budget, already stretched by recent floods and the East Coast Low.
“We are behind the eight-ball before we start the budget each year,” she said.
“It has become a major issue for us and every council in Australia.”
She said there has been “a significant flow-on effect” since the freeze, with cuts to some services possible in this year’s council budget.
These cuts are anticipated to impact the community greatly, she said.
The three-year freeze was put in place during treasurer Joe Hockey’s 2014-15 federal budget, under then-prime minister Tony Abbott.
She said a restoration of the indexation will take pressure off council spending on insurance, raw materials, employment and contract expenses as funding has failed to keep up with inflation.
“Our job is to make sure our infrastructure is safe and secure for public use and our roads and recreational assets are maintained,” Cr Kristy McBain said.
“It is a multi-faceted issue we are facing with the budget.
“We budget on the principal that whatever comes in is spent around the shire.”
She said the freeze, combined with a 1.5 per cent increase in the rate cap, an 11 per cent increase in the emergency services and fire levy and a 2.5 per cent increase in award wages is putting unnecessary pressure on council finances.
According to the Australian Local Government Association, the government has estimated the result of the freeze will see councils lose out on $925million in support over the four years, with regional and rural areas hit the hardest.
The NSW local government sector has called on federal treasurer Scott Morrison to restore indexation in this year’s May budget.
Fairfax Media has reported the freeze may be lifted as part of this year’s budget, and Opposition leader Bill Shorten, earlier this month, proposed fast-tracking next year’s grants funding to stimulate economies.
According to the Department of Infrastructure and Regional Development, last year council was entitled to $4,799,115 in general purpose cash payments and $1,821,985 for roads.
