Australian councils are calling on the Federal Government to honour its pre-election commitment to “fair increases” in Financial Assistance Grants to local governments.

Before the May 2022 election, federal Labor committed to the “long-term financial sustainability of local government” through increases to grant allocations, including “fair increases” to Financial Assistance Grants.

ALGA President Councillor Linda Scott said many local governments rely on FA Grants to remain sustainable and urgently need an increase in this untied funding.

“Australian councils are facing significant financial challenges, especially in the wake of recent natural disasters,” Cr Scott said.

“Restoring FA Grants to at least one percent of Commonwealth taxation revenue would be throwing councils a much-needed lifeline, as well as being an investment in the liveability and productivity of our communities.

“Councils only collect 3.5 per cent of national taxation and are heavily reliant on funding from other levels of government.

“FA Grants have declined from one percent of Commonwealth taxation revenue in 1996 to just 0.52 per cent today, and this is making it harder for us to provide the local facilities and services our communities rely on.

“The Government campaigned on fair increases to FA Grants, and we want to see the first round of increases when they deliver their first full Budget in May this year.”

Recent research, commissioned by ALGA, shows FA Grants make up more than 20 per cent of annual operating expenditure for around one in four Australian councils.