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Australian Government Grants To Local Government Exceed $1.5 Billion

Australian Coat of Arms

MEDIA RELEASE

Senator The Hon Ian Campbell
Minister for Local Government, Territories and Roads
Manager of Government Business in the Senate

TRS17/Budget 11 May 2004

Local communities will reap the benefit of more than $1.5 billion in local government financial assistance grants in 2004-05, the Minister for Local Government, Territories and Roads, Senator Ian Campbell, said today.

It is an increase of $24.6 million above this year and $368.4 million more than Labor's last Budget in 1995. Of the total, $1,061.9 million is for general purpose grants and the remaining $471.2 million for local road grants.

"Local councils can spend these grants on their own priorities because we recognise that they know their local needs better than we do," Senator Campbell said. "The grants make an enormous contribution to maintaining the nation's local road network and help councils provide critical services to their communities.

"The grants are particularly important to councils in rural and regional Australia, which often have higher costs and only a limited capacity to raise revenue. As a result, more than two-thirds of these grants, around $1 billion, will go to about 580 rural and regional councils.

"The grants are in addition to the funding we provide under the Roads to Recovery programme, which we have just extended for another four years. The extension will inject an additional $1.2 billion into Australia's local roads. The grants will not be affected by our new land transport plan, AusLink, which is funded in today's Budget.

"The grants are also in addition to the $26.3 million in supplementary local road funding for South Australia announced by the Prime Minister last month to address its current disadvantage in the funding formula.

"Our decision to provide supplementary funding is another example of our commitment to local government, and is a speedy initial response to one of the findings of the Hawker Report into local government funding."

The details of this year's local government financial assistance grants are attached.

Media contacts:

Wayne Grant (Senator Campbell's Office) 02 6277 7060 / 0407 845 280

 

Local government financial assistance grants (1), 2004-05

  General Purpose Local road Total Increase(2)
         
  ($m) ($m) ($m) (%)
NSW 356.6 136.7 493.3 1.3
VIC 262.0 97.1 359.1 1.3
QLD 204.4 88.3 292.6 2.7
WA 104.3 72.0 176.4 1.7
SA(3) 81.3 25.9 107.2 1.2
TAS 25.5 25.0 50.5 1.7
NT 10.6 11.0 21.6 1.8
ACT 17.2 15.1 32.3 1.1
Total 1061.9 471.2 1533.1 1.6

Figures may not add to totals due to rounding

(1) The 2004-05 entitlement for financial assistance grants is $1,544.6 million. However, councils were overpaid by $11.5 million in 2003-04 and this overpayment will be recovered in 2004-05. As a result, the actual cash paid to councils in 2004-05 will be $1,533.1 million. An adjustment arises each year 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. This year, there was an overpayment because of lower than expected movements in CPI in 2003-04.
(2) The differences in the percentage grant increases are due to differences in the estimated population growth of the states and territories. General purpose grants are allocated between states and territories on the basis of population, whereas they receive fixed shares of the local road grants.
(3) Does not include the state's $4.3 million supplementary local roads grant in 2004-05 as it will be paid under separate arrangements rather than the financial assistance grants legislation.