HE peak body for NSW councils has resolved to lobby for the end of a measure it says will cause a $288 million funding hole across the sector in the next three years.
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Councillors at the 2014 Local Government NSW (LGNSW) conference unanimously voted to lobby the federal government to abandon freezing the indexation of financial assistance grants to councils.
Orange City Council estimated the measure would leave a $90,529 shortfall in the council’s budget. Orange delegates were at the conference, which on Monday considered motions from councils about the issue.
After the vote LGNSW president Keith Rhoades said councils were living the reality of the government’s budget decision not to index the important grants.
“The consequence of this funding freeze is a $288 million hole for the NSW local government sector - and our communities - over the next three years,” Cr Rhoades said.
“Financial assistance grants are extremely important as they are untied, which means they can be used for council services, facilities and infrastructure that the community deems to be most important - not as directed by the Australian government.
“They are also an essential part of councils’ revenue base, particularly as NSW councils are constrained from increasing their own source of revenue by rate pegging.
“[The sum of] $288 million dollars over three years will not drastically impact the Australian government, but it is a severe hit to individual councils and even more so in country areas where they have extensive road networks and small rate bases.”
Orange City councillor Reg Kidd said with support from the Minister for Local Government Paul Toole and Premier Mike Baird he hoped the state government could lobby the federal government to change its mind.
“They’re certainly not happy about it, it’s a substantial amount of money ... Paul Toole spoke about it before the question had even been asked so it was clear he understood the importance of it,” Cr Kidd said.
Cabonne Council deputy mayor Lachie MacSmith, who also attended the conference, said he was optimistic the federal government would rethink it’s decision because it would leave councils significantly short of funding for infrastructure projects.