Councils across NSW have refuted the federal government’s claim that the abolition of the carbon tax will lead to savings that will compensate them for any expected budget shortfalls.
The controversial freezing of Consumer Price Index (CPI) indexation for Financial Assistance Grants (FAGs), which are no-strings-attached funding for councils to spend according to local priorities, has sparked an outcry from the councils’ peak body which is calling for its reversal.
The grants program is just one of the targets of the Abbott government’s harsh austerity measures which on the north coast, the National Party’s Page MP Kevin Hogan has tried to put a positive spin to.
But it won’t wash for northern rivers councils with mayors saying say they’ve been shortchanged.
Lismore mayor Jenny Dowell says councils now face a bleaker financial future as a result and that Lismore would get around $100,000 less than expected because of the decision to freeze rather than index the grants,
When Local Government NSW (LGNSW) called for the CPI freeze be reversed, Nationals MP and deputy prime minister Warren Truss issued a press release and instead accused the media of misreporting the federal government’s widely criticised policies and budget.
The electorate was also blamed for its inability to understand the ‘strong action’ that was necessary to restore the budget.
Mr Truss’s media response to LGNSW said, ‘In the near hysteria that has ensued since the federal budget was announced, much has been misunderstood and misreported.’
‘The government is asking all sectors of the economy to contribute to repairing Labor’s debt and deficit disaster, and so it is only reasonable that local government should also make a contribution.’
He also claimed the CPI freeze would ‘be more than offset by the abolition of the carbon tax and the injection of infrastructure investment for local communities.’
But Local Government NSW president, Cr Keith Rhoades, told Echonetdaily that ‘the freeze on the Federal Financial Assistance Grants will have a long-term impact on councils and communities, and will not be offset completely by the negligible savings made by abolishing the carbon tax or the “injection of infrastructure investment”.
‘Financial Assistance Grants are untied, which means councils can assess the individual needs of their community and put that funding into where it’s needed most. That could be infrastructure or services, other than that dictated by the federal government,’ Cr Rhoades said.
‘While populations continue to grow and the CPI continues to rise, the federal Financial Assistance Grants will still be stuck at the same level as 2013/14.
‘What’s more, the infrastructure funding Truss speaks about is time limited. Unfortunately, under the decision to freeze the Financial Assistance Grants, which are particularly important to regional and rural councils, [their level] will be permanently lowered,’ Cr Rhoades said.