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Federal Assistance To Local Government Reaches $1.5 Billion

Minister for Regional Services, Territories and Local Government

WT2/Budget /2003
13th May 2003

Local government will receive just over $1.5 billion in Local Government Financial Assistance Grants in the 2003-04 Budget, the Minister for Regional Services, Territories and Local Government, Wilson Tuckey, said today.

This represents an increase of nearly 3.7 per cent, or $53.4 million, over last year and an increase of $340.6 million since the Federal Government came to office.

"Of the $1.5 billion, $1,042.7 million is for general purpose grants and $462.7 million is for local roads grants," Mr Tuckey said.

"Councils are responsible for the bulk of the nation's road network (by length) and these grants contribute significantly towards maintaining these roads and other services provided by councils."

"The grants are provided annually by the Federal Government to local councils and are in addition to the $1.2  billion we are providing under the Roads to Recovery programme.

"The Roads to Recovery programme is a partnership between the Commonwealth and local government in the rejuvenation of essential transport infrastructure, supporting the economic and social aspirations of people in city and regional Australia.

"The Federal Government is aware of the importance of these financial assistance grants to councils, particularly councils in rural and regional Australia.

"A cornerstone of our arrangements is that councils that through no fault of their own have relatively higher costs in providing services or relatively lower ability to raise revenue, should receive relatively higher grants.

"As a result, more than two-thirds, or around $1 billion, of these grants will go to about 580 rural and regional councils.

"Last year, I initiated an inquiry into local government and cost shifting from state and territory governments to local governments. Since then, the inquiry committee has issued a discussion paper, sought submissions and held public hearings, with local government responding positively to the inquiry.

"I am looking forward to receiving the inquiry report later this year," Mr Tuckey said.

An additional $2.9 million will be paid to councils in 2003-04 because of adjustments applied to the 2002-03 grants.

Adjustments arise because the total grants pool is estimated before the start of the grant year using expected increases in CPI and population for the coming year.

At the end of the grant year, once the actual movements in CPI and population are known, the total grants pool is recalculated. Any adjustment to the total grants pool is made by adjusting payments to councils in the following year.

Media contact: Graeme Hallett 02 6277 7060 / 0419 688 440

Local Government Financial Assistance Grants, 2003-04

   General purpose
Local roads
NSW 351.6 134.2 485.9 3.4
VIC 258.4 95.4 353.8 3.7
QLD 197.6 86.7 284.3 4.4
WA 102.3 70.7 173.1 3.8
SA 80.4 25.4 105.8 3.1
TAS 25.0 24.5 49.5 3.2
NT 10.4 10.8 21.2 2.9
ACT 17.1 14.8 31.9 3.5
Total 1,042.7 462.7 1,505.4 3.7

Figures may not add to totals due to rounding