The Australian Local Government Association has welcomed Labor’s commitment to return indexation to council Financial Assistance Grants if it wins government this coming weekend.
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Tasmanian councils received $36.1 million in grants from the federal government this financial year with $18.6 million for roads funding and $17.5 million for general purpose use.
It also received payments in June 2015 of $18.6 million for roads and $17.2 million for general purpose use.
Northern councils received $12.6 million this financial year while North West councils received $9.9 million.
The federal government in its 2014 budget decided to freeze indexation on the grants over forward estimates, meaning grant contributions would not increase in line with the consumer price index or population growth.
The decision meant that Tasmanian councils would effectively lose $18 million over three years with the City of Launceston, the state’s largest council, preparing to forego up to $100,000 a year.
Federal regional development spokeswoman Julie Collins said at last week’s National Assembly of Local Government this week that Labor would reintroduce indexation from July 2017 if re-elected.
Australian Local Government Association president Tony Pickard welcomed the commitment.
"The three-year pause on FAGs indexation implemented in the 2014-15 budget was unexpected and continues to have a severe impact on the sector,” he said.
“Having certainty on the indexation of this untied funding will ensure that our local councils have the resources necessary to fix local community infrastructure and fund crucial community services.”
Cr Pickard said the recently released 2015 National State of the Assets: Roads and Community Infrastructure Report estimated that 11 per cent – or around $27 billion worth – of community infrastructure was in need of replacement, maintenance or upgrades.