June 27, 2018
Councils will have the opportunity to start projects earlier than planned or earn some extra interest income after the Federal Government announced it will pay half of its 2018-19 Financial Assistance Grants (FAGs) early this year.
FAGs grants are one of the major annual sources of revenue for all Australian councils, and are usually paid in quarterly instalments each August, November, February and May.
But on Wednesday, Federal Local Government Minister Dr John McVeigh announced the government was paying half the 2018-19 FAGs grants early.
“This early cash injection of more than $1.2 billion will allow councils to start work straight away on new projects and to benefit from additional interest on cash in the bank,” Dr McVeigh said.
“These vital funds support local government to deliver the infrastructure and services communities need, such as critical transport, health, recreation, environmental and employment projects.”
Dr McVeigh said supporting local councils to provide essential services to Australians was a key priority for the government.
“We recognise the importance of giving councils the power to determine local priorities in their region,” Dr McVeigh said.
“Under the FAGs program, Australia’s 546 councils have access to untied funds to allow them to spend the money according to local needs.”
FAGs grants have been a sore point with the South Burnett Regional Council for the past six years.
In 2012, the South Burnett’s FAGs funding was unexpectedly cut by $1.4 million, which threw the council into financial turmoil and directly led to the introduction of the former $200 a year Road Levy.
In 2014-15, the Federal Government added to the problem by introducing a three-year freeze on the indexation of FAGs grants, which South Burnett Mayor Keith Campbell has estimated cost the region a further $2.8 million.
The indexation freeze was lifted in last year’s Federal Budget, but the South Burnett’s share of FAGs funding dropped again from $6.815 million to $6.730 million in 2017-18.
At Monday’s annual Budget meeting, the Council reported it expected a 1 per cent increase in FAGs funding for 2018-19.
It was budgeting to receive $6.798 million, but on Thursday it was announced the Federal Government will provide $6.991 million in the coming year.
Receiving the money earlier than planned could allow the Council to start some projects ahead of time.
Alternately, it could put the money to work earning interest until scheduled projects were ready to begin.
Cherbourg Aboriginal Shire Council will be in a similar position, though with much less funding since FAGs is partly calculated on per-capita basis.
Cherbourg’s FAGs grant last year was $618,268. This year it will receive $642,474.
