Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

I would like to talk about the Financial Assistance Grants—grants that were first created in 1975 by the then Labor government to enable local governments to provide roads and services in their local communities. In particular, I would like to talk about the Financial Assistance Grants indexation pause that was part of this year's budget from the Abbott government. This will cost local councils around Australia around $925 million in grants which they are not receiving but which they would have received if it had not been for this pause on indexation. That is a cut to local governments—by the Abbott government—of $925 million over four years. Interestingly, some figures that I have recently got from the Parliamentary Library looking at these allocations show that the cut is actually disproportionate in non-metropolitan Australia. The figures show that metropolitan Australian councils will receive a cut of $245 million, and non-metropolitan councils—that is, smaller regional and rural councils in Australia—will receive a cut of $680 million to their Financial Assistance Grants over the four years. It is a very significant amount of money, and councils are certainly writing to me—and I am sure they are writing to the government minister and to other members of government—about these cuts. There is great concern in local communities about which services are going to need to be cut from communities because of this decision by the government.

There is an article in Launceston's The Examiner today which talks extensively about these cuts. I want to quote from some of the commentary about this cut in relation to council areas in Tasmania. A spokesperson for the state Liberal Minister for Local Government, Peter Gutwein, says that it is a significant issue in Tasmania. He says: 'Just like the state government, local governments were blind-sided by the last federal budget.' He is right about that. He goes on: 'It is disappointing that Financial Assistance Grant growth was unilaterally cut by the federal government.' It is indeed very disappointing. Barry Jarvis, LGAT—Local Government Association of Tasmania—President and Dorset Mayor, said that he would be lobbying the federal government to reinstate the indexation as one of his key priorities because, he said, councils would be having to make some hard decisions, and councils in Tasmania would see 13 per cent less funding by 2018. To run through some of those cuts: the Meander Valley Council over the four years will be receiving $1 million less; the Launceston City Council—$1 million less; the Northern Midlands Council—$900,000 less; the Dorset Council—$868,000 less; the West Tamar Council—$697,000 less; the Break O'Day Council—$652,000 less; the George Town Council—$447,000 less; and the Flinders Council—$328,000 less. And that is just in Northern Tasmania.

We can look around the country at some of these losses in funding. The Brisbane City Council in Queensland is another example: more than $16 million will be lost over the four years in forgone indexation that the council would have received—that is $16 million in services that the Brisbane City Council will no longer have available for its residents; important funding, I am sure. The Gold Coast City Council will receive over $8 million less in funding; the City of Greater Geelong—over $7.8 million less; the Western Downs Regional Council—$7.6 million less; the Toowoomba Regional Council—$6.8 million less; the Blacktown City Council in New South Wales—$6.7 million less; and the Wollongong City Council will receive over $6 million less in funding over the four years. These figures add up right across Australia and local governments and local councils will no longer be able to deliver the services that they are currently delivering.

Interestingly, Minister Truss put out a media release—obviously, my release got under his skin a little—saying that my figures did not add up. The figures I used are from the Parliamentary Library and they are based on Grants Commission figures. They also include population growth and they are an estimation. Of course, they are an estimation; they are for four years—just like his estimations of any figures that he might come up. He said that whilst there might a freeze, it is more than offset by other programs.

He talks about extra money in black spot funding and Roads to Recovery. That money is cancelled out by the cuts to the financial assistance grants program over that same period. So it is not an increase; it is, in fact, more tied money. The financial assistance grants came in two streams: a general rate and a local roads rate. Councils were free to spend this money on local priorities. Councils could actually make decisions about what their local residents needed and spend the money accordingly, whereas the money that the minister is talking about are tied grants to Roads to Recovery and black spot funding for very specific projects. They are not like financial assistance grants, which are at the discretion of local government and local council.

Minister Truss went on to say that there is a new billion dollar Stronger Regions Fund and a Community Development Grants Program. We know the Community Development Grants Program is just rebadged money that they have taken from other projects that were already receiving money but were uncontracted Regional Development Australia Fund money and reallocated it to their own seats. Indeed, 90 per cent of funding under that program went to Liberal-held seats. So it is very clear to see what happened to that. I am sure that none of the local government areas in Labor-held seats will be getting much of that money. The Stronger Regions Fund is simply a rebadging of Labor's Regional Development Australia Fund, where we had money available. The coalition took $350 million out of rounds 5A and 5B of the Regional Development Australia Fund.

Clearly, there is not a whole heap of new money coming from this government to local councils, particularly in rural and regional Australia. Clearly, the minister, as a National Party member, has let down rural and regional Australia by not standing up against these cuts—cuts that are impacting disproportionately on rural and regional local governments right across the country. Some councils are saying that they might even have to put up rates, make rates changes or cut essential services. Some of my councils have already laid off some staff in response to these cuts. One has changed the way that they are charging for child care to make up for some of these cuts. Goodness only knows where this will end up.

Councils cannot make up for these cuts. They are never going to be able to make up for almost a billion dollars in cuts from financial assistance grants, where they did have the discretion to spend the funds as they wanted. Almost a billion dollars over four years has been cut by the Abbott government, disproportionately affecting regional councils. The Abbott government have cut $680 million from regional councils right across Australia, disproportionately affecting some of those seats. There are so many more cuts that I could go through—cuts to councils right across Australia—but I do not want to waste the House's time. But I do want to point out one that stands out—the Durack electorate. People will know that that electorate has been hit hard by the cyclone, particularly the banana crop in Carnarvon. There has been a cut of more $60 million in that electorate alone in financial assistance grants over the next four years. I am sure that money could be used by that local community and by those councils to provide critical services to the local community, particularly at this time, which I am sure is very difficult for them.

This is a really important issue in regional and rural Australia. It is a really important issue for local government, and I think it shows that the Abbott government are not serious about engaging with local government and are not serious about trying to stand up for those councils in the bush, in regional and rural Australia.