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
TOTAL LOCAL GOVERNMENT FUNDING	2,288.7

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

	2014-15	2015-16	2016-17	2017-18	2018-19
General Purpose Assistance	1,585.3	1,585.3	1,585.3	1,652.3	1,722.9
Untied Local Road Funding	703.4	703.4	703.4	733.2	764.5
TOTAL FINANCIAL ASSISTANCE	2,288.7	2,288.7	2,288.7	2,385.5	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)

	NSW	VIC	QLD	WA	SA	TAS	ACT	NT	Total
General Purpose Assistance	507.2	394.6	318.7	174.5	113.3	34.5	26.0	16.5	1,585.3
Untied Local Road Funding	204.1	145.0	131.8	107.6	38.7	37.3	22.6	16.5	703.4
TOTAL FINANCIAL ASSISTANCE	711.3	539.6	450.5	282.0	151.1	71.8	48.6	33.0	2,288.7