Very few have escaped the cost-cutting blade in the latest federal Budget, and Local Government assistance appears to be another victim.

The indexation of Financial Assistance Grants has been frozen for the next three years, meaning the grants will not be increased in line with CPI and population increases.

The Australian Local Government Association (ALGA) says it means councils will miss out on a $96 million increase in Financial Assistance Grants they had been expecting.

The freeze will hurt the councils’ ability to provide essential local services and infrastructure in local communities.

ALGA president Felicity-Ann Lewis says councils must re-evaluate which services and infrastructure they can continue to provide when federal funding remains static.

Local Government Association of Queensland chief executive Greg Hallam said on Wednesday that the decision meant smaller councils and rural residents will have to do a crazy amount of heavy lifting.

“Local councils have done as much as they can to become more efficient so this decision is likely to hit jobs and community projects,” he said.

“On top of the increased transport and building costs to councils as a result of the indexation of fuel excise, this budget is going to be felt by local councils in Queensland and the communities they serve for years to come.

“Rural, remote and indigenous councils get the double whammy... a freeze on grants at a time when petrol and diesel costs will rise.”