Councils have applauded budget measures to restore indexation to Financial Assistance Grants (FAGs), after a tough three-year freeze.

Government papers show the 2014 freeze FAGs indexation cost local communities more than $600 million worth of services and infrastructure over the last three years, felt particularly by councils in regional and remote Australia.

Damien Ryan, Vice President of the Australian Local Government Association (ALGA), welcomed the Government’s decision to restore the indexation.

“Financial Assistance Grants are an important untied payment that councils invest in providing better infrastructure and better services for our local communities,” Mayor Ryan said.

“By restoring indexation to this important payment, the Government is honouring its commitment to communities to ensure that, as far as possible, every citizen regardless of where they live can have equitable access to municipal services.

“However, there is still a long road ahead before councils recover from the freeze as it permanently reduced the base level of the Financial Assistance Grants payments.”

ALGA also welcomed the Government’s decision to provide $40 million over two years in supplementary road funding for South Australia.

“We’re pleased that the Government heard our calls, and the calls of the Local Government Association of South Australia, for fairer supplementary road funding for South Australia which was pulled in 2014-15,” Mayor Ryan said.

“This funding is immensely important to helping South Australian councils upgrade and maintain their local road networks, although a question still remains over the future of the funding beyond 2018-19.”