The South Burnett Regional Council may miss out on millions of dollars in road funding over the next three years after the Federal Government announced a freeze on Financial Assistance Grants (FAGs) to councils in last night’s Budget.
FAGs grants are normally indexed annually to keep pace with cost increases.
But according to the Local Government Association of Queensland (LGAQ), the decision means Queensland councils will miss out on at least $182 million in extra funding they would normally have expected to receive over the next three years.
LGAQ chief executive Greg Hallam said the decision to freeze FAGs meant smaller councils would not escape bearing some Budget pain.
“Local councils have done as much as they can to become more efficient, so this decision is likely to hit jobs and community projects,” he said.
“On top of increased transport and building costs as a result of the indexation of fuel excise, this Budget is going to be felt by Queensland councils and the communities they serve for years to come.
“Rural, remote and Indigenous councils get the double whammy – a freeze on grants at a time when petrol and diesel costs will rise.”
Mr Hallam said all councils used FAGs to build and maintain community assets such as local roads, swimming pools, libraries and community halls, as well provide services to the young, the elderly and community groups.
“Each local council decides how these funds are used. But when you have got a freeze on funding for the next three years, some services will suffer,” he said.
South Burnett Mayor Wayne Kratzmann said today he was “disappointed” with the announcement.
“The cuts the Queensland Grants Commission have made to our current FAGs funding over the last two years have already cost our region almost $2 million,” he said.
“This could cost us even more over the next three years.”
The Mayor said he was also disappointed with the decision to index fuel costs, and said the impact of this on Council’s bottom line was still unknown.
While he applauded the Federal Government’s decision to support the Roads To Recovery and Black Spot programs and bring in a new Bridges To Recovery program – and understood the need to get the Commonwealth’s Budget back onto a sound footing – he thought some other decisions were unwise.
“Everyone has been living in really tough times the last few years,” he said.
“I think introducing doctor visit payments, lowering the rate of pension increases and reducing some family benefits is going to dent consumer confidence and business confidence.”
The Federal Budget impacts are now also likely to play a role in the Council’s own 2014-15 budget deliberations, which the Mayor said are in their sixth round.
