Jul 14, 2014

Private members motion

Mr ALBANESE (Grayndler) (10:31):  I move:

That this House:

(1) condemns:

   (a)  the decision by the Government to freeze indexation of Financial Assistance Grants to local governments across Australia;

   (b)  the resulting cuts to local government funding of $925 million over the next four years, affecting every council in Australia; and

   (c) the failure of the:

       (i) Minister for Infrastructure and Regional Development to protect this critical funding to local governments across Australia; and

       (ii)  National Party to stand up against the cuts on behalf of regional and remote councils, which are affected most by the freeze;

(2) notes:

   (a)  Financial Assistance Grants are used by every local government in Australia to maintain local roads and deliver critical community services;

   (b)  the Government’s indexation freeze represents cuts of $925 million to local governments in every town and city over the next four years;

   (c)   regional and remote councils will be most affected by the cuts, with larger service areas and more kilometres of roads to maintain per ratepayer;

   (d)  the viability of some regional and remote councils may be compromised as a result of the cuts;

   (e)  the pressure now on councils to increase council rates or cut services due to the cuts; and

   (f)   within six years, the value of the cuts will be greater than the entire Roads to Recovery budget; and

(3) calls upon the Government to:

   (a)  listen to local government concerns about the impact of freezing indexation of Financial Assistance Grants on local roads and community services; and

   (b)  immediately reverse the decision to freeze indexation of Financial Assistance Grants to local government over the next three years.


A sudden and significant change in government revenue can spell disaster for a government.

It is something the previous Labor government learned firsthand after 2009, when the worst global financial upheaval since the Great Depression slashed government revenues across the board.

Such a funding difficulty is about to befall the local councils of this nation, courtesy of the Prime Minister’s decision to freeze financial assistance grants for the next three years and make that change permanent.

Many will be forced to slash spending on road maintenance and other services, with implications for road safety, particularly in rural and regional areas.

This financial assistance grants decision represents a $925 million hammer blow to financial positions of councils across the nation.

While all councils are affected, those that will bear the greatest burden are small councils in rural and regional areas, which on some reports rely on financial assistance grants for up to half of their annual income.

I moved the motion before us today because I want those opposite to reconsider this foolish decision.

I want those opposite to talk to the mayors and shire presidents in their electorates and hear firsthand about the impact of this cut. I want to hear from those opposite, particularly from the Nationals, whose constituents will be most affected, about how on earth they could possibly support this budget move.

Before I go further, let me give you a real-life example that cuts to the heart of this issue. On 16 June the Mayor of Greater Geraldton, Ian Carpenter, told the ABC’s AM program that he was worried about the effect of this decision on 15 small local government areas outside Geraldton. Mayor Carpenter said:

They’ll become unsustainable. It’s a very, very serious problem and I can’t stress that enough. To take away the indexation is just crazy.

It is just crazy, Mayor Carpenter said, and he was right. He could not be any clearer, and his comments are being echoed around the nation by mayors of all political colours.

Councils now have three options, none of them attractive: increase rates, slash services or increase borrowing.

Increased rates will place further pressure on family budgets.

A reduction in services is likely to occur in road services and maintenance in particular, with real consequences, particularly in the bush.

Last month’s national assembly of the Australian Local Government Association was concerned enough to pass an urgent motion calling on the government to reverse its decision.

These cuts are also coming at a time when the government is already hitting local government with other budget measures.

The head of the Local Government Association of Queensland, Greg Hallam, noted after the budget that the change came with the reintroduction of indexation of fuel excise—another move that will impact disproportionately on residents of rural and regional areas.

Mr Hallam is right, but he left out another budget measure that will hurt councils—that is, the Prime Minister’s move to claw back funding for states and local governments by ending the federal government’s contribution to the cost of providing rates discounts to pensioners.

So in fact it is a triple whammy. Just as this Prime Minister is piling cut after cut upon Australian families in areas like health, education, pensions and child care, he is also piling cut after cut onto councils.

When you pile up the cumulative effect of all three, it is clear the councils of Australia are paying a higher price than they should for this Prime Minister’s political agenda.

In Queensland the Bundaberg Shire Council in the electorate of Hinkler has revealed that the decision on FAGs will turn what is expected to be a modest surplus this year into a $5 million deficit because of the decision to stop paying them money in advance. This comes on top of the fact that the Prime Minister also cut the money that was allocated to local government to every council area through the Regional Development Australia Fund when they came to office.

It comes on top of the disbandment of the Urban Policy Forum and the Australian Council of Local Government  and on top of their abandonment of constitutional recognition of local government, which had the support of the then shadow minister Barnaby Joyce but the bipartisanship of which the Liberal and National parties committed, they walked away from prior to the last election.

I am asking this parliament to send the Prime Minister a very clear message on financial assistance grants. That message is: think again. I commend the motion to the House.