CASH-STRAPPED councils have warned ratepayers to brace for “some pain” as the reverberations of last week’s budget bombshell continue to be felt.
Last week the Abbott government announced a three-year freeze on financial assistance grants (FAGs) in a move designed to save an estimated $1 billion.
The decision means council FAGs will not rise in line with either the consumer price index (CPI) or population growth, stripping local councils of hundreds of thousands of dollars in funding.
FAGs are used primarily to allow councils to fund important community services and keep pace with infrastructure needs, such as upgrading roads, parks and facilities.
Liverpool Plains Shire Council (LPSC) mayor Ian Lobsey said he was dismayed at the announcement and warned it would cause a “significant impact on the lives of residents”.
The freeze could cost LPSC an estimated $300,000 over the next three years, representing a bitter blow to a council attempting to ward off the threat of amalgamation.
“What I’d really like to know is how the Australian government expects councils like LPSC to continue servicing their communities to the standards they expect and deserve without putting up rates?” Cr Lobsey said.
“This will have a significant negative impact on all council’s, but particularly so on rural and regional areas and I fear communities like ours will be hardest hit.
“It is the rural and regional councils which rely most heavily on FAGs due to smaller rate bases and extensive road networks.”
Gunnedah Shire Council’s preliminary assessment puts the loss at $280,000, but maintains it will be at least several weeks until more concrete figures emerge.
“That’s a very simplistic analysis at this time because while the government is taking away the grants, they’re also increasing grants in other areas,” acting-general manager Colin Formann said.
“The detail of those increases, or even if they are going to eventuate at all, is not clear yet and on top of that the state government is in crisis talks at the moment.
“So we’ll be saying to councillors is there’s going to be some pain. We know bad things are coming and decisions will have to be made – but we don’t think we’ll get the full, accurate detail on that until June.”
The potential impact of the cuts was raised by Gunnedah’s deputy mayor Gae Swain at a meeting with New England MP Barnaby Joyce late last week.