Local Government Association calls for fair funding deal from the Commonwealth

LOCAL GOVERNMENT ASSOCIATION CALLS FOR FAIR FUNDING DEAL FROM THE COMMONWEALTH

Local Government Association President Alderman Kerry Moir today called on the Commonwealth Government to re-assess the per capita methodology that is used to calculate Financial Assistance Grants (FAGs) from the Commonwealth to Local Government Councils.

“Because the grant is distributed to the States and Territories on a per capita basis you get a totally inequitable situation for example where is the equity where a council such as Wollongong City in NSW (population 191,600) receives $11.3million and yet the entire 62 Councils in the NT (population 200,844) receives $10.6 million”, said Alderman Moir.

“Is it fair that the Lajamanu Council (population 939) receives $131,701 in FAGs and yet McKinlay Council (population 1043) in Queensland receives $2,008,610. And it is not just every remote Indigenous council in the Northern Territory that is missing out. For example Alice Springs Council (population 30,194) receives $987,699 and yet Port Augusta Council in South Australia with a third of the population (13,979) receives $2,809,376.

“I ask you, where is the equity in a funding formulae that discrimates against councils in the Northern Territory in such a clear and obvious way? LGANT has been lobbying for a change to this per capita methodology and also supports the Australian Local Government Association’s objective of a fair share of national taxation revenue for Local Government.”. Ends

3 July 2007

Contact: LGANT President Alderman Kerry Moir 0419 303 378

Manager Communications Phil Maynard8936 2890 0429 090 833

Attached: Methodology explanation and comparison spread sheet.

COMMONWEALTH FINANCIAL ASSISTANCE GRANTS (FAGs) TO LOCAL GOVERNMENT COUNCILS.

FAGs are distributed to State/Territory Grants Commissions from the Commonwealth Grants Commission on a per capita basis. It is then up to the State/Territory Grants Commissions to distribute the funding on a fiscal equalization (needs) basis.

The per capita grant is $53.87 but larger or less needy councils can have this reduced to $16.20 per capita by the State/Territory Grants Commissions thus freeing up additional money for the smaller and more needy councils within that State/Territory.

The best example of this is the Brisbane City Council which attracts $50.6m to Queensland but only receives the minimum from the Queensland Grants Commission of $16.1m thus freeing up $34.5m to be distributed to smaller and more needy councils in Queensland.

The problem for the Northern Territory is that because the FAG comes to the States and Territories on a per capita basis (the only Commonwealth Grant to be distributed in this way) the Northern Territory Grants Commission (NTGC) only receives $10.6m in total to be distributed amongst the 62 local governing bodies in the NT. There are no large Councils in the NT (such as Brisbane) that attract a large per capita grant and all councils in the Northern Territory receive less funding than equivalent councils in the other states.

Below are a number of tables that shows the inequities of the current system of per capita distribution of FAGs to Councils.

BREAKDOWN OF FAGs TO INDIGENOUS LOCAL GOVERNMENT COUNCILS ACROSS AUSTRALIA

National Average = $314.96 per head (Total $20,639,902)

NT Average = $148.62 per head. (Total of $5,860,519)

If Indigenous Councils in the NT received the Australian average they would receive a total of $12,419,817, an additional $6.5m.

COMPARISONS OF TOTAL FAGs TO THE NORTHERN TERRITORY

Northern Territory ( population 200,844 spread over 62 councils) $10,6m

WollongongCity (population 191,600) $11.3m

Greater Geelong (population 200,000) $12.8m

LakeMcQuarrieCity (population 189,000) $10.6m

COMPARISON OF SELECTED INDIVIDUAL COUNCIL FAGs ALLOCATIONS

Note:

All figures quoted are from the ‘Local Government National Report ‘the 2004-05 Report on the Operation of the Local Government (Financial Assistance) Act 1995and published by the Australian Government Department of Transport and Regional Services.