Grant cap creates budget black hole
The Federal Government's freezing of the Financial Assistance Grants will leave a $2.7M black hole in AlburyCity's budget over the next four years.
A report tabled at the Finance and Administration Committee tonight revealed that Council will lose out on $2.7M in funding by 2017-18.
The Financial Assistance Grants is an annual funding allocation given to each Australian council. The funding amount in previous years has been indexed to increase with inflation and population size.
However, the Federal Government announced in its budget that the annual grants would be frozen. As a result AlburyCity will lose out on $2.7M in budgeted income over the next four years.
"Albury Council had already identified savings as part of the Service and Efficiency Review process. Effectively we are now being told that we have to absorb this budget blow and find another $2.7M in savings," Chair of AlburyCity's Finance and Administration Committee Cr David Thurley said. "Collectively New South Wales councils will miss out on $288M in funding due to this cap. When you consider that the sector already absorbs $520M in costs shifted from State and Federal Governments onto local government we are facing an uphill battle."
"This is a significant hit for every Council in New South Wales. At a time when we are being told we need to be 'Fit for the Future' the Federal Government has made an announcement that is going to make it harder for us to deliver the services and projects our community needs."
Cr Thurley is not expecting the budget shortfall to impact on rates.
"Rate levels are capped by the State Government and there are no plans to request a special variation to rates. Instead we will need to further reassess our operations and the timing of capital works projects over the next four years to see if we can cover reduced levels of income ongoing. It may result in certain projects scheduled for delivery over the next four years will need to be postponed, but it's too soon to say which those might be."