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Financial Assistance Grants to Local Government

The Australian Government has provided around $31.1 billion in Financial Assistance Grants to local government since 1974-75 (including 2008-09). The grants are currently provided under the Local Government (Financial Assistance) Act 1995 (the Act).

The grants have the following components:

  • a general purpose component which is distributed between the States and Territories according to population (ie, on a per capita basis), and
  • an identified local road component which is distributed between the States and Territories according to fixed historical shares.

Both components of the grants are untied in the hands of local government, allowing councils to spend the grants according to local priorities.

Local government grants commissions have been established in each State and the Northern Territory to recommend the distribution of the Financial Assistance Grants to local governing bodies in accordance with the Act and the National Principles for allocating grants. The grants are paid in quarterly installments to State and Territory Governments for immediate distribution to local governing bodies.

The quantum of the grants pool changes annually in line with changes in population and the Consumer Price Index, so as to maintain their real per capita value. (The Act provides a discretion to the Treasurer to alter this annual indexation).

The 2008-09 total grant payment of $1.891 billion is 7.1% or $125.3 million more than the 2007-08 payment.

The grants for each State and Territory for 2008-09 are:

Jurisdiction General Purpose
$		 Local Roads
$		 Total
$		 Increase from
2007-08
%
NSW 428,488,129 168,638,472 597,126,601 7.2
Vic 324,424,635 119,832,447 444,257,082 6.9
Qld 261,509,296 108,904,701 370,413,997 7.2
WA 131,822,321 88,873,772 220,696,093 7.7
SA 98,464,853 31,943,548 130,408,401 6.4
Tas 30,673,609 30,802,070 61,475,679 6.8
NT 13,455,463 13,615,647 27,071,110 6.7
ACT 21,078,523 18,637,989 39,716,512 6.3
Total 1,309,916,829  581,248,646  1,891,165,475  7.1

For a more detailed explanation of the operation of the Act and the provision of Financial Assistance Grants to local government, refer to the 2005-06 Local Government National Report.

For information on the 2008-09 grants to individual local governing bodies within each state and territory refer to:

As a consequence of the February 2009 Victorian bushfires and Queensland floods, the Government brought forward payment of the final 2008-09 financial assistance grant quarterly instalment of $111 million for Victorian councils and $92 million for Queensland councils, on 23 February 2009.

Early Payment of 2009-10 Financial Assistance Grants

To assist councils deal with the effects of the economic downturn, on 12 May 2009 the Government announced in the Commonwealth Budget that it would bring forward for payment to all councils in June 2009, one quarter of the 2009-10 estimated financial assistance grant pool of $1.92 billion.

For the payments received by individual local governing bodies in June 2009 refer to:

Under the early payment of the 1st quarter of the 2009-10 grants, the ACT received $10,081,560.

The estimated balance of the 2009-10 financial grant pool, $1,439 million will be paid to councils in four quarterly instalments in 2009-10, once the Australian Government approves the recommended financial assistance grant distribution for 2009-10 from the state and Northern Territory local government grants commissions.

The total financial assistance grant allocation to councils over the 2008-09 and 2009-10 financial years is estimated at $3,820 million. Around two-thirds of this will go to rural and regional councils. Financial assistance grants assist in supporting jobs and services in local communities.

Other Australian Government support to local government includes the Roads to Recovery Program, the Community Infrastructure Program and the Black Spot Program. Local governing bodies in South Australia also receive supplementary funding for local roads.

For further information on the respective local government grants commissions, refer to:

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Last Updated: 2 July, 2009