Council, mayors association call for restoration of funding program

Narrabri Shire Council and the NSW Country Mayors Association have called on the federal government and opposition to commit to restoring the Commonwealth Financial Assistance Grants.

The Financial Assistance Grants program provides a vital funding stream to local councils, enabling them to provide a mix of services and infrastructure.

The Country Mayors Association has highlighted that the level of funding under the program has eroded over the years from one per cent of the Commonwealth’s tax take in 1996 to just 0.5 per cent today.

“Local councils – particularly those located in rural and regional areas like Narrabri Shire, have continually voiced concern and alarm at this decrease in funding,” Narrabri Shire mayor Darrell Tiemens said.

“Reduction of this funding further contributes to the financial sustainability challenges that rural and regional councils continually face, including cost shifting from state and federal governments to councils.

“Combined with rate-pegging and increasing operating costs, this has an impact on our delivery of services and infrastructure, including maintaining council’s 2,343-kilometre road network.”

Council’s concerns around reduction of Financial Assistance Grants funding were highlighted in its submission to last year’s Federal Inquiry into Local Government Sustainability.

“Around 46 per cent – or nearly half – of council’s income comprises grants and funding from state and federal governments,” Mayor Tiemens said.

“Any reduction in this funding impacts hugely on service delivery, which includes waste facilities, water services, libraries, pools, recreational facilities as well as infrastructure such as roads.”

Cr Tiemens emphasised the significant contribution of Narrabri Shire to the federal tax income.

“As the second largest economy in the region – after Tamworth, on average Narrabri Shire residents and corporate entities contribute an enormous amount of tax to the federal government.

“Therefore, our area deserves its fair share of the Commonwealth’s tax take in line with this significant contribution to our nation’s economy.

“Together with the CMA, I hope to see a commitment from all sides of our federal government to return Financial Assistance Grants funding to 1996 levels.

“This will help guarantee the financial sustainability of Narrabri Shire Council and ensure the continued delivery of critical services and infrastructure to our communities.”

Chairman of the NSW Country Mayors Association Rick Firman OAM raised concerns that this falling revenue was a major contributing factor to the financial sustainability challenges that many councils in rural and regional NSW currently face.

“Declining Commonwealth contributions, coupled with rate pegging in NSW and increasing operating costs are making it very difficult for councils, and particularly country councils, to continue to deliver services and infrastructure at the levels our communities need,” Cr Firman said.

The CMA has written to the Prime Minister, Anthony Albanese, and both the Leader of the Opposition, Peter Dutton and to the Leader of the National Party, David Littleproud requesting one on one meetings to discuss the issue.

The leaders have also been invited to address the March 28 meeting of association, which has a theme of financial sustainability.

The push to address local government funding concerns comes as six councils apply for special rate variations for the coming financial year, with many attributing the need to seek more rate revenue due to escalating costs.

Federation, Gunnedah Shire, Northern Beaches, North Sydney, Shoalhaven City and Upper Hunter Shire councils have applied to IPART for special variations.

Earlier this year, Gunnedah Shire confirmed it will proceed with its special rate variation application despite ongoing objection to the proposed rate increase.

It was decided at an extraordinary November council meeting to apply for a 37.67 per cent cumulative rate rise over two years. This would however be capped at 32.25 per cent for residential, business and farmland, raised.

The remaining balance would come from the mining categories.

Gunnedah is not alone in its application with many other councils across the North West region also previously applying for rates increases including Tamworth (36.3 per cent over two years) and Armidale (58.8 per cent over three years).