Freeze on federal grants a challenge to councils

September 12, 2015

SOUTHERN Grampians Shire Council will write to Deputy Prime Minister Warren Truss in order to highlight the impact of a three-year freeze to federal Financial Assistance Grants to local government.

The letter will raise “the importance of the financial sustainability of local government for our communities, the importance of Financial Assistance Grants to our Council’s budget and sustainability”.

The Shire will urge Mr Truss to restore the indexation of the federal grants “as soon as possible”.

Councillor Dennis Dawson said the freezing of federal grants was a “significant challenge to councils, particularly regional councils such as us because we don’t have the ability of metropolitan councils to derive income from other areas and have the benefits of economies of scale.”

Cr Katrina Rainsford said that the federal government had a “responsibility” and “duty” to help maintain services in the community “and not just look after the marginal seats and try to follow the latest fashion”.

The motion to lobby Mr Truss was passed by unanimous vote on

Shire services director Bronwyn Herbert said that the council, like every other in Australia, had been asked by its representative bodies, Australian Local Government Association and the Municipal Association of Victoria, to consider the motion.

Ms Herbert said 250 councils had already passed similar motions and it was about “making a statement and letting the Federal Government know what this means”.

“I think council is very well aware of this issue, the freezing of Financial Assistance Grants for the three year period, and the impact it has.

“It has been a challenge to incorporate that impact in this financial year and it’s an issue for future budget processes.”

Councillor Paul Battista successfully asked for an amendment to the motion to send a copy of the letter to Wannon Federal MP Dan

Cr Dawson said the grants were a “particularly important component” of the Shire’s revenue and urged funding to be restored to “proper levels”.

“The impact of freezing of the grants over the three year period will see a reduction of $1.2 million over the period,” he said.

“In our Strategic resources plan it has much more of an impact thank just the $1.2 million; those reductions compound over time and further reduce our capacity.

“Rate capping, which is being proposed by the State Government, will also come in the financial year 2016/17, which is the last year that the assistance grants have been reduced.”

Cr Dawson said the Shire knew that its costs were going to go up and that finding that amount of savings in cash or savings was difficult.

“A result of these decisions made by other levels of Government, our ability to fund and deliver services has been reduced,” he said.

Cr Dawson also said the “community needs to begin to consider what level of service it will demand in certain areas, and what services might be achieved given the financial challenges in the future”.

Cr Rainsford said that “local government is very transparent, closest to the people” and therefore it was “more difficult to get away with the lurks and perks and misuse of community’s or taxpayers’ dollars than other levels of government”.

“It’s basically where the management and maintenance goes on and I keep saying that housekeeping doesn’t seem to be sexy,” she said.

“There are big buckets of money: billion dollar funds that everyone
has to bid for.

“Go through an election cycle, launch a new program and we all have to bid for it, which means that they are not actually paying for the maintenance of services, basic management and actual infrastructure that councils have.”

Cr Rainsford said there did not have to be “a new program with a new name and bells and whistles” to fix the federal grant issue.