Jump to Content

Report on Performance

Regional outputs and programmes

Output 2.2.2: Local Government

(Territories and Local Government Business Division)


Local governments are assisted to serve their communities

The department delivers Australian Government funding for local governments across Australia so they can deliver essential services such as planning and development, community services, and infrastructure such as roads (see Table 4.5). The department also actively promotes and supports best practice in local government.


Grants are allocated and distributed to local governments in line with national principles

In 2005-06, the department administered financial assistance grants to Australia's 701 local governments under the Local Government (Financial Assistance) Act 1995. Payments exceeded $1.6 billion in 2005-06 and, with indexation, will reach almost $1.7 billion in 2006-07.

The department administered the second of three annual payments for South Australian councils, providing an extra $9 million for local roads.

Local and state governments were consulted about the House of Representatives Standing Committee on Economics, Finance and Public Administration report Rates and taxes: a fair share for responsible local government (the Hawker report), which recommended substantial changes to local government relationships and funding. The department helped the Australian Government to implement the actions it agreed to in its response to the Hawker report (tabled on 22 June 2005).

While the government did not support major changes to the arrangements for allocating financial assistance grants, it agreed to ask the Commonwealth Grants Commission to review the distribution of local road grants between states and territories. In June 2006, the Commonwealth Grants Commission reported on its review of the distribution of local road grants. The government is considering the report.

In April 2006, an intergovernmental agreement on local government issues was signed by the Australian Government, Australian Local Government Association, and all state and territory governments under the auspices of the Local Government and Planning Ministers' Council.

Better practice in local government is recognised and promoted e.g. through a national awards process

In 2005-06 the department promoted local government successes and achievements through:

  • the Australian Government's annual National Awards for Local Government, which attracted over 200 entries
  • a leading practice seminar held in Griffith, New South Wales, which focused on planning for the needs of diverse generations and communities, including children, women and new arrivals, attended by about 40 delegates
  • an online database of the more than 2,000 projects nominated for awards since 1997.

The 2006 National Awards for Local Government attracted 210 entries. They featured 18 categories, including asset management, health and wellbeing, IT, strengthening Indigenous communities, ageing, and innovation in regional development.

Category winners were announced in late August 2006. More information about the awards and a list of category winners can be found at www.dotars.gov.au/local/index.aspx.

Local governments are assisted to improve their land use planning and development assessment systems

In 2005-06 the department supported the Development Assessment Forum to reform and harmonise Australia's development assessment (DA) systems. Some of the projects the forum successfully completed in 2005-06 included:

  • Australia-wide consultation on a draft leading practice model for development assessment to help cut red tape
  • a national electronic data exchange standard to facilitate the electronic processing of development applications
  • national standards in DA definitions to harmonise DA practices and systems throughout Australia.

For more information about the forum visit www.daf.gov.au.


Information and funding is provided to approximately 700 local governing bodies across Australia

In 2005-06 information and funding was provided to 701 local governing bodies across Australia, including 91 Indigenous councils. As the ACT has no local government, its share is paid directly to the ACT Government.



The actual price of this output in 2005-06 was $2.5 million.

Overall performance

Table 4.5 Trends in services to and funding for local government





2006-07 Est.

Financial assistance grants

Local road grants






General purpose grants






Supplementary funding for South Australian councils






Total grants






Bodies funded





approx 700

Annual report in respect of grants (to be) tabled

24 Dec 2003

26 May 2005

31 May 2006

Dec 2006

Dec 2007

Local government awards

Nominations closed

July 2002

July 2003

July 2004

June 2005

June 2006

Nominations received






Categories of award






Awards presented

Nov 2002

Nov 2003

Nov 2004

Nov 2005

Nov 2006

Price of output






Administered programme-Local Government Financial Assistance Grants
(Territories and Local Government Business Division)


Local governments are assisted to provide essential services at the community level

The Australian Government has provided financial assistance grants for local governments since 1974-75. In 2005-06, Australia's 701 local governing bodies received payments of more than $1.6 billion in financial assistance grants. To maintain their value, these grants are indexed each year for changes in population and consumer prices:

  • about 30 per cent of funding was distributed as local road grants. These funds were allocated between states according to fixed shares, and between local governments within a state on the basis of road expenditure needs
  • about 70 per cent of funding was distributed as general purpose grants. These funds were allocated between states on the basis of population, and between local governing bodies within a state on the basis of relative needs. Funds are untied and can be spent on local priorities determined by councils
  • overall, roughly two-thirds, or $1.1 billion, went to councils in regional and rural Australia, including $28 million to Indigenous councils.

Grants averaged roughly 9 per cent of local government revenue overall, but provided more than half the revenue of some councils.


Grants are administered in line with the Local Government (Financial Assistance) Act 1995

In 2005-06, as required by the Act, the federal Minister for Local Government, Territories and Roads calculated the amount of grant funding to be allocated to each state.

The department worked closely with local government grants commissions in each state and territory to allocate and distribute grants in line with national principles.

Grants are paid in quarterly instalments, with the first payment to states and territories being made on 15 August each year, or as soon as possible after then.

An annual report on the operation of the Act is tabled as soon as practical after 30 June each year

The Local Government (Financial Assistance) Act 1995 requires the tabling of a separate annual report on the operation of the Act, as soon as practical after 30 June each year.

The 2004-05 annual report was developed in consultation with the states and territories, as required by the Act, and tabled in the Australian Parliament on 31 May 2006. The report is also on our website (www.dotars.gov.au).

Work on the 2005-06 report started in August 2006 with a formal request for contributions from the federal minister to state and territory ministers and local government associations.


Grants are distributed to approximately 700 local governments

Financial assistance grants were paid to 701 local governments in each state and the Northern Territory. Although the Australian Capital Territory has no local government, it also receives a share.


$1,623.2m (up from $1,617.1m at Budget)

The actual cost of this programme in 2005-06 was $1,618.6 million.

Overall performance

Administered programme-Supplementary funding to South Australian councils for local roads
(Territories and Local Government Business Division)


Local governments have equitable access to Australian Government funding for local roads

To facilitate equitable access to funding for local roads, the Australian Government agreed to provide $26.3 million over three years to South Australian councils.

Grants are distributed in line with the local roads grants component of financial assistance grants

The funds are distributed on the same basis as the local road grants component of financial assistance grants.


Supplementary funding is distributed to 74 local governments in
South Australia

In 2005-06 the second payment of $ 9.0 million was provided to 74 councils.



The actual cost of this programme in 2005-06 was $9.0 million, as planned. This amount is due to increase to $13.0 million in 2006-07 in line with the Australian Government's commitments.

Overall performance