The Local Government Association of Queensland (LGAQ) has given a cautious thumbs up to last week’s State Budget because of its implicit commitment to fix flaws in the Council grants system.
LGAQ CEO Greg Hallam said Queensland’s councils were $61 million better off thanks to this year’s State Budget, and have moved closer to the $600 million per annum guaranteed funding target the LGAQ is seeking.
However, Mr Hallam warned that grant reform still had some way to go.
“Having spent a lifetime chasing dollars for councils, with the attendant frustrations of a myriad of grants programs across what has now been five state governments, I will take the commitment to grant reform embedded within the Budget papers this year as the biggest win for the sector,” he said.
Mr Hallam said he had seen a report carried out by consultants KPMG for Deputy Premier Jackie Trad in the second half of last year which had laid out a blueprint for a future Council grants system.
“It is – without doubt – one of the best pieces of thinking and analysis I’ve seen by state government in all my years at the LGAQ,” he said.
“They nailed it, producing the blueprint for a future grants system – locked-in funding, thematic, flexible, allocative rather than submission-based and (with) simpler acquittal processes. Hallelujah!”
Mr Hallam said in the past few years the Auditor-General had “touched up” councils – sometimes harshly – for not undertaking long term financial planning, but he thought this was unfair in the current situation.
“It’s like fighting with one hand tied behind your back, impossible to do when you don’t know year to year what grant funding councils will receive from 1 William Street,” he said.
“It’s no different to a lottery, made worse if you must find matching grants and you have no discretionary revenues.
“That (grant funding) model is well and truly broken.”
In November 2012, the Queensland Grants Commission slashed the South Burnett’s annual grant allocation by more than $1.4 million without warning.
The sudden loss of funding forced the South Burnett Regional Council to introduce the Road Levy.
It has remained in place ever since, partly because that funding has not been restored and partly because the Federal Government also introduced a three-year freeze on its Financial Assistance Grants (FAGs) in 2016-2018.
The FAGs freeze was estimated to have cost the Council an additional $2.8 million in lost revenues.
Combined, the grant cut and FAGs freeze have cost the Council close to $10 million over the past 5 years.
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