Media Release: NSW councils face $30 million pothole thanks to Federal Government grant freeze

19 August 2014
NSW councils will soon face the harsh reality of a $30 million federal budget shortfall, as the first round of Financial Assistance Grants are allocated since the Australian Government announced in May it would not be raising the grants in line with CPI or population increases. 
President of Local Government NSW (LGNSW), Cr Keith Rhoades AFSM, said thanks to the Australian Government’s decision to freeze the Financial Assistance Grants in the last budget, NSW councils have been left with a $30 million shortfall in the 2014/15 financial year. 
“Unfortunately, this is only the tip of the iceberg. Over the next four years, NSW councils are facing a projected shortfall of $288 million.
“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.
“The freeze on these vital grants will have a significant impact on the lives of everyday Australians who are used to, and expect, quality services, roads and facilities from their councils.
“If no change is made to the Australian Government’s calculations for Financial Assistance Grants, the shortfall for NSW councils in 2014/15 will be $29.9M, $62.2M in 2015/16, $95.8M in 2016/17 and $99.8M in 2017/18.
“These grants, which are untied, are used to maintain a wide range of important infrastructure including local roads, bridges, recreation facilities, libraries, cultural facilities, neighbourhood centres and a variety of services to children, young people, the elderly and people with disability.
“While certain grant schemes specifically aimed at improving local road networks have increased, it’s the Financial Assistance Grants that councils can actually use towards services and initiatives that are unique and meet the wants and needs of their local communities.
“If the Australian Government and Mr Truss were really serious about supporting local communities and ensuring they have quality services and infrastructure, they would reverse their alarming decision to freeze the Financial Assistance Grant scheme,” said Cr Rhoades
Media Enquiries 
Cr Keith Rhoades, AFSM             LGNSW President: 0408 256 405 
Alexandra Power                     Acting Director – Communications: 0427 435 309