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Federal budget cuts to impact on local government leisure

Federal budget cuts to impact on local government leisure
June 2, 2014

Cuts in Federal Government funding to local councils seems set to impact on local government leisure services with aquatic and recreation centres, arts venues, fitness programs   and sports facilities and visitor attractions all set to suffer from reduced finances.

The cuts, announced in the recent Federal budget, also appear likely to impact on planned facility developments by local councils – and have a particular impact on regional and rural councils.

The cuts will be as a result of the Federal Government being set to freeze of indexation of the Financial Assistance Grants (FAGs) - which will cost councils $925 million in the next four years and hundreds of millions of dollars each year thereafter. The grants have been aimed at funding essential community services and maintaining infrastructure.

In the Australian Local Government Association (ALGA)’s latest newsletter, ALGA suggest that the indexation of FAGs will force councils “to find additional revenue - perhaps from rates, cut services or find efficiencies. 

“(Cuts to) FAGs in particular has sent many councils back to review their own budgets to assess local spending on services and infrastructure (with) the question of efficiencies sparking debate ... about possible job losses in councils.”

Local Government Association of Queensland Chief Executive Greg Hallam has said that the freeze is likely to hit rural, remote and indigenous communities hardest as these councils rely on such grants for much of their income.

Hallam stated "local councils have done as much as they can to become more efficient so this decision is likely to hit jobs and community projects.

"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."

According to the Victorian Grants Commission, FAGs made up more than 25% of income for West Wimmera Shire in 2012/13, 20-25% for Yarriambiack and Towong and 15-20% in Buloke, Gannawarra, Loddon, Southern Grampians, Moyne, Ararat, Pyrenees, Corangamite, Moira, Strathbogie, Indigo and East Gippsland.

In most metropolitan councils in Victoria, the grants account for less than 5% of income.

The Municipal Association of Victoria has claimed that the move will cost the state’s already-struggling councils $134 million over the next three years

The MAV said to cope with the reduction in funds councils would either have to increase rates significantly or reduce vital services with MAV President Bill McArthur saying the move was “catastrophic, particularly for the rural councils that are already struggling.

“The grants provide up to 27% of (councils’) total funding so it will have a massive impact.

“Such a significant federal funding cut leaves councils with two choices: to cut services or increase rates. And for some of these smaller shires, it could amount to a 5% rate rise on top of any other proposed rate increase — just to retrieve that lost federal money.”

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