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Election2019 Blog

by LGAQ Media Executive, Craig Johnstone by LGAQ Media Executive, Craig Johnstone

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The big issue the parties cannot see

While this federal election campaign has been notable for the amount of attention parties have given to local community issues like waste management and housing, there remains one significant blind spot in their thinking when it comes to Canberra’s responsibilities. This blind spot has a name,  financial assistance grants. These untied grants are a lifeline for many local communities as their councils simply would be unable to provide the level of services the public expects without them. The funding source that most people associated with councils, rates, can only plug part of the gap between the services council provides and the money they have to pay for them.  The remainder is filled by funds from a range of sources, including financial assistance grants.

The trouble is that these grants have steadily eroded over time and with successive federal governments. This is where the blind spot comes in. The Commonwealth raises 87 percent of all taxes in Australia, while local government is responsible for just 3 percent. Yet the major source of funding to councils from the Commonwealth, financial assistance grants, is half what it was 25 years ago. For local communities, that means fewer roads can be maintained, less green space can be set aside and better water treatment facilities are being delayed because of the financial squeeze being put on their councils from Canberra. These grants maintain local jobs and create new ones, provide infrastructure that communities value and give the federal government a community connection that it otherwise would not have.

Councils from around Australia, not just in Queensland have long called for these grants to be restored to proper levels. That is, at least the equivalent of 1 percent of total Commonwealth taxation revenue. The challenge at this election is for the major parties in particular to acknowledge there is a problem and some indication they will fix it if they win on 18 May. There have been some initial indications from Labor that it may be prepared to address the issue but as yet no detail has been forthcoming.

Until it is, local councils will keep banging the drum for some fairness to be shown in relation to these grants. Each and every local community in Australia benefits from them so, in an election where local issues seem more important than ever, it should be a no brainer.

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