Councils left behind by Labor - Hon Darren Chester MP

Ratepayers will pay more for local services and councils will build less community infrastructure following the Albanese Government’s decision to cut funding for Local Government in the Federal Budget. 

Shadow Minister for Local Government and Territories Darren Chester said Labor had short-changed Australia’s 537 Councils and local communities would pick up the tab.

“As families grapple with the increased cost of living, we can expect less roadworks and community infrastructure to be built and ratepayers will be forced to pay for more services with potential rate rises to fill the gap left by the Federal Budget,” Mr Chester said.

“Labor’s mean-spirited treatment of local government will force councils to bid for reduced funds under competitive programs because the Albanese Government doesn’t trust locals to make good decisions for their communities.

“This ‘Canberra knows best’ attitude is a hallmark of Labor Ministers who don’t understand how small communities work.”

Mr Chester said Councils across Australia were disappointed with the decision to cease further rounds of funding for the Local Roads and Community Infrastructure Program (LRCIP).

“Under LRCIP, the previous Federal Government gave power to local councils to make decisions and build community infrastructure with a guaranteed allocation of funding and we trusted democratically-elected Councillors to make the right choices for their communities,” Mr Chester said.

“It allowed local councils to build thousands of community projects that they would never have been able to afford from their existing rate bases. It also meant they could develop a pipeline of community projects and didn’t waste time and resources applying for grant programs which are always over-subscribed.”

Mr Chester said the impact would be more severe in rural, regional and remote areas where Federal Government funding is a higher proportion of council revenue.

“Abandoning further rounds of LRCIP will be devastating for regional councils which depend heavily on the Federal Government for funding local projects,” he said.

“The pressure will fall onto locals with rate increases required to deliver road upgrades and community infrastructure. As building costs increase, councils will be able to build less, and communities will wait years for projects because of this decision.”

Mr Chester said Local Government had also been misled by the Albanese Government which promised prior to the 2022 Federal election that Labor would: “focus on the long-term financial sustainability of Local Government through increases to grant allocations, including fair increases to Financial Assistance Grants”.

On Tuesday, that promise was broken. The Federal Budget saw Financial Assistance Grants cut as a percentage of tax revenue from 0.52% to 0.50% in stark contrast to councils’ long-term aim of achieving 1.0% of tax revenue.

“I have met with Local Government Associations across the country and the resounding feedback is that many councils are increasingly facing financial challenges and they rely on a Federal Government which is willing to partner with them to deliver critical services and infrastructure,” Mr Chester said.

“Many councils will be frustrated with the Federal Budget outcomes and will have no choice but to increase rates to provide the services expected of them by their communities.”

The Albanese Government has also failed to continue both the Regional Airports Program and the Regional Airport Security Screening fund with local councils expected to pay the shortfall.

“Many regional airports are maintained by councils, who will now bear the entire cost of funding existing airports and security requirements with no realistic avenue for Federal Government funding,” Mr Chester said.

“Prior to the Labor Government being elected, councils which run a regional airport had access to dedicated regional funds which would assist them to do things such as meet the operational requirements of aeromedical and other emergency services in the region.

“They will have no choice but to find the money from elsewhere in their budget at the expense of ratepayers.”