July 5, 2024
A delay in the payment to councils of Federal Government Financial Assistance Grants has affected the end-of-financial year bottom line of local councils.
South Burnett Mayor Kathy Duff said she only heard about the later-than-expected payment this week, which meant the SBRC had received less grant money in the 2023-24 financial year than it expected.
The Mayor, who has been attending the Australian Local Government Association conference in Canberra, said she immediately asked Local Government Minister Kristy McBain about the delay in the payment, which had been expected before June 30.
Minister McBain said she did not know about it but would investigate.
The grants are Commonwealth money, however the payments are administered by the State Government.
The delay in payment has affected the way councils balance their books at the end of the financial year.
For example, at the Toowoomba Regional Council’s June meeting, the TRC forecast an operating surplus of more than $800,000.
However, the Council has now been told that a pre-payment of more than $7 million, which had been budgeted to be received in the 2023-24 financial year, would now be received in the 2024-25 year.
This means the full payment would now be recorded as revenue in the 2024-25 financial year rather than being split across the two years.
As a result, TRC will now likely finish the 2023-24 financial year with an operating deficit instead of a surplus, with the final figure to be determined as part of end-of-month reporting.
Mayor Geoff McDonald raised the issue of “government cost-shifting to councils” at the ALGA conference, saying it was time to rethink the system.
“The change of timing this week in payments highlights the need for greater certainty as well as more funding going forward,” Mayor McDonald said.
“In reality, these unconstrained grants from the Federal Government should be renamed from Financial Assistance Grants to Financial Survival Grants.
“Maintaining ageing infrastructure, while also building for growth is a challenge all councils are facing.
“Three cents in every dollar of taxation comes to local government, while research commissioned by the ALGA reveals local councils own and maintain more than 33 per cent of community infrastructure.
“We are the level of government closest to our communities. The funding model we have just doesn’t make sense. It is time for the Federal Government to revisit the way local governments are funded.”
The TRC handed down its Budget for 2024-25 on June 25; the SBRC Budget is due to be unveiled on July 10, and Cherbourg Council will deliver its Budget on July 17.
