Council counting cost of financial assistance shortfall

WHILE the Federal Government applauds the announcement of “new payments to councils under the Financial Assistance Grants program”, councils such as Bega Valley Shire are counting the cost of the shortfall.

Member for Eden-Monaro Peter Hendy announced the Bega Valley Shire Council would receive around $6.7million in FAG funding, the first round of which since the federal budget was released this week.

He said the government was “committed to supporting local communities to deliver the services and facilities they need”.

“Councils are free to spend this untied grant funding according to local priorities, including for infrastructure, health, recreation, environment, employment and roads projects.”

However, BVSC chief financial officer Lucas Scarpin said that announced figure is close to $200,000 less than expected and will significantly impact the council’s budget.

“A reduction in the draft allocation of Financial Assistance Grant funding from the Office of Local Government will result in a $196,000 budgetary shortfall,” Mr Scarpin said.

“This has council’s estimated 2015 FAG revenue falling from $6.923m to $6.727m. 

“When broken down the shortfall represents $133,000 in general funding and $63,000 in local roads funding.

“We are assessing the situation and options of how to absorb the shortfall will be presented in September’s quarterly budget review statement,” he said.

President of Local Government NSW Keith Rhoades AFSM, said thanks to the Federal Government’s decision in the last budget it would not be raising the grants in line with CPI or population increases, NSW councils have been left with a $30million shortfall in the 2014/15 financial year.

“Unfortunately, this is only the tip of the iceberg,” Cr Rhoades said. 

“Over the next four years, NSW councils are facing a projected shortfall of $288million.

“While the Minister for Infrastructure and Regional Development, the Hon Warren Truss MP, is out spruiking the Financial Assistance Grants as a  ‘vital cash injection’ for local communities, councils are trying figure out how to plug the hole in their budgets left by the freeze on the grant scheme. 

“What’s more, the communities hardest hit by the freeze will be those in rural and regional council areas, which rely more heavily on Financial Assistance Grants due to their small rate bases and extensive road networks.”


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