"That's the big one as far as I am concerned," Cr Fitzpatrick said.

"In 1975 it was 1.5 per cent of tax revenue; it's now about 0.7 per cent. Councils in 1975 were getting double what we're getting," he said.

Several years ago they were frozen and were supposed to be increased through indexation but it never happened.

FAGs are considered to be a real mainstay for councils. The grants are untied which means they can be spent on whatever council sees as a priority.

"The money can be spent anywhere and until they're back to at least 1 per cent, councils are basically unsustainable," Cr Fitzpatrick said.

"The FAGs are the big issue and if I could get one thing out of the budget, that increase to FAGs would be it," he said.

The request forms the key plank of ALGA's submission to the federal government.

But there is another matter which is causing major financial headaches for council and that is the time delay in getting Aboriginal heritage matters approved.

Delays are no fault in any way of the Aboriginal community, something the Twyford Theatre committee has been at pains to point out over its issues bring power in from a different location than originally planned. The delays are resulting in massive cost blowouts as building costs escalate.

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Cr Fitzpatrick said it had taken almost nine months to get the Aboriginal Heritage approval to put power cables under Beach St in Merimbula to bring electricity into the new Twyford Theatre and it had "only just got sorted out".

In the meantime costs are rising but the grant money remains the same.

A similar situation exists in Kameruka Lane where council was sealing the road with the help of a grant. After Aboriginal heritiage issues were raised, work was halted and six months has passed. The roadworks grant relied on council also making a contribution which was calculated to be $500,000 but now Cr Fitzpatrick said it was getting closer to $1m.

The options are stark: either the project or council's budget will be in jeopardy.

The ongoing effects of natural disasters are also giving councils pause for thought and while it is all very well to receive grant funding to rebuild, often what is needed is something quite different.

"We have to look at entire systems to see where the problems are," Cr Fitzpatrick said.

"For example Bega is a disaster waiting to happen. It floods with just minimal rain but there's no plan for it. We need to work out how we can mitigate. We should be looking at cause and effects," Cr Fitzpatrick said.

Mitigation is something councils much further north are having to look, at as they contemplate rebuilding in completely different locations.