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8 May 2007 019TRS/Budget

Australia's local governments will receive $1,749.4 million in Australian Government financial assistance grants in 2007-08, the Minister for Local Government, Territories and Roads, Jim Lloyd, announced today.

The Government's grant funding is $65.2 million, or 3.9 per cent, higher than in 2006-07.

It consists of $1,211.7 million in general purpose grants and $537.7 million for local roads. The local road grants are in addition to the funding that councils receive under the AusLink Roads to Recovery Programme.

"South Australia's local councils will receive an extra $13.5 million in 2007-08 for their roads to address the state's disadvantage in the local roads funding formula. It is the first instalment in a $57 million package of supplementary road funding for South Australian councils over the next four years," Mr Lloyd said.

"The supplementary funding will ensure that South Australian councils continue to receive a share of the Government's local road grants that is appropriate to their needs. It will give them the certainty they need to plan their road programmes over the next four years.

"We originally addressed the disadvantage faced by South Australian councils in our interim response to the Hawker Report into local government and cost shifting. We provided the councils with $26.3 million in extra funding over the three years to 2006-07, and asked the Commonwealth Grants Commission to review the interstate distribution of our local roads grants.

"The Government has now considered the commission's report, and I am releasing it today. The commission concluded that there was a lack of consistent and comparable data about:

  • the length of the local roads in each state;
  • the number and deck area of the bridges on the local roads in each state;
  • local road use in each state; and
  • the maintenance expenditure by local councils on the local roads and bridges in each state.

"The data that is available is collected to suit the needs of the individual states and is not comparable across Australia. The commission attempted to seek the views of external experts, but their advice was contested by a number of the state governments.

"The commission wanted to use this data to recommend a new interstate distribution of the local road grants based on the relative road lengths of various types, the relative use of those roads and the different costs of road maintenance.

"Instead, the commission was forced to recommend what it called an interim distribution', which it conceded was not its preferred model. We have not accepted the commission's recommendation for the interim distribution, because of the lack of good information.

"Without reliable information, the Government cannot be confident that any systemic change to the existing interstate distribution of local road grants would be equitable.

"As a result, the Government has decided to retain the existing interstate distribution and continue the supplementary funding for South Australian councils.

"The commission also proposed that further work be undertaken over the next five years to improve the data on local road use and condition, with a view to recalculating the interstate distribution. The Government has not accepted this suggestion because of the poor prospects of obtaining the rigorous set of standardised data from all the states that the commission would need," Mr Lloyd said.

The details of this year's local government financial assistance grants are attached. The Commonwealth Grants Commission's Report on the Review of the Interstate Distribution of Local Road Grants is available at www.dotars.gov.au/department/statements/2007_2008/index.aspx

Media contact: James Larsson 02 6277 7060/0434 305 130

Local government financial assistance grants(1), 2007-08

NSW 403.1 156.0 559.1 3.9
VIC 299.4 110.9 410.2 3.9
QLD 237.1 100.7 337.8 3.9
WA 120.2 82.2 202.4 3.9
SA(3) 91.6 29.5 121.2 3.9
TAS 28.9 28.5 57.4 3.9
NT 12.1 12.6 24.7 3.9
ACT 19.4 17.2 36.6 3.9


1,211.7 537.7 1,749.4 3.9

Figures may not add to totals due to rounding.

  1. This table is based on an estimate of the factor used to calculate the 2007-08 grant pool. This factor will be determined in June 2007 along with the final determination of the 2006-07 grant pool. The grants paid in 2007-08 will be adjusted by the amount of any variation between the 2006-07 estimated and actual grant pool entitlement. This adjustment is expected to be an additional $1.1m.
  2. Any 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 South Australia's $13.5 million supplementary local road grant in 2007-08, which will be paid separately.