ALGA analysis of the 2015-16 Federal Budget

Financing local government

ALGA’s analysis of key points in the 2015-16 Federal Budget from a local government perspective.

Financial Assistance Grants

  • The 2015-16Budget maintains the system of payments to support local government, through Financial Assistance Grants (FAGs)
  • In the 2015-16 financialyear, the Australian Government will allocate $2,289 billion in FAGs for local government services to the community. The freeze on indexation announced in the 2014-15 Budget remains in place, the impact of this freeze was estimated last year to be $925 million in lost FAGs until 2017-18. In 2017-18, indexation is projected to be re-instated, by which time, the annual funding base is estimated to be 13% lower than it should have been, without the impact of the freeze.
  • FAGs continue to comprise two components: general purpose assistance grants; and untied local roads grants.

Table 1: Commonwealth funding for local government 2015-16 ($m)

General Purpose Assistance 1,585.3
Untied Local Road Funding 703.4

Table 2: Total Financial Assistance Grants to local government 2014-15 to 2018-19 ($m)

General Purpose Assistance 1,585.31,585.31,585.31,652.31,722.9
Untied Local Road Funding 703.4703.4703.4733.2764.5
TOTAL FINANCIAL ASSISTANCE2,288.72,288.72,288.72,385.5 2,487.4

FAGs are increased annually, however, the indexation freeze applied by the Government in the 2014-15 Budget remains until 2017-18, by which time, councils are estimated to have forgone $925 million in projected FAGs payments.

Table 3: Financial Assistance Grants to local government by jurisdiction 2015-16 ($m)

General Purpose Assistance 507.2394.6318.7174.5113.334.526.016.51,585.3
Untied Local Road Funding 204.1145.0131.8107.638.737.322.616.5703.4
TOTAL FINANCIAL ASSISTANCE711.3539.6450.5282.0 151.1