‘Something Has to Give’: Country mayors demand Federal Government restore crucial funding

The NSW Country Mayors Association (CMA) is calling on the Australian Government to restore Financial Assistance Grants (FAGs) to one per cent of Commonwealth taxation revenue for local government.

CMA Chairman Mayor Rick Firman has urged the government and Opposition to commit to reinstating the funding which has been halved over nearly three decades.

“Federal governments of all persuasions have slowly but surely eroded funding for local government,” Cr Firman said.

“It is alarming that the annual FAGs provided to local government by the federal government have decreased from one per cent of Commonwealth taxation revenue in 1996 to just point-five per cent today.”

Rural and regional councils in NSW face significant financial pressures, with some local government areas (LGAs) as large as small European countries and responsible for maintaining up to 1500 kilometres of roads.

Councils are also required to deliver essential public services — including administration, recreational facilities, pools, libraries, and waste management — across multiple locations to ensure equity of access, increasing operational costs.

“In many of our 87-member council LGAs, there is little or no public transport. Therefore it is almost impossible to consolidate service delivery in centralised locations to cut costs,” Cr Firman said.

“Our board and our members are committed to ensuring that those who choose to live and work in country NSW have the services and infrastructure available that validates that choice. It’s all about equity.

“We are asking that the Commonwealth and Opposition to please – step up to the plate, to support our members in providing the services and infrastructure that our communities need and deserve.”

Some Riverina councils, such as Griffith and Narrandera, have hiked rates significantly to address funding shortfalls.

The CMA has formally requested meetings with Prime Minister Anthony Albanese, Opposition Leader Peter Dutton, and National Party leader David Littleproud to discuss the issue. Mr Dutton and Mr Littleproud have also been invited to attend the CMA’s March meeting.

When asked if the CMA had received any response, Cr Firman told Region that they were still waiting for a reply.

“We understand they are busy, but we hope they will give us time to discuss this crucial issue,” he said.

Aside from lobbying the Federal Government, the CMA is considering alternative strategies to improve financial sustainability. However, Cr Firman said councils had limited options.

“NSW local government are essentially hogtied with how we can raise extra revenue. We have rate pegging which simply doesn’t work and is outdated. We’re considering all manner of options,” Cr Firman said.

“There are some who’ve created some business arms, there are many going down the path of special rate variations, some cutting back services and staff – all options are on the table.

“However, with cuts to services and staff, there’s only one group who suffers – our communities that we proudly serve. Something has to give and we need our Federal Government, Opposition and Crossbenchers to please do something to help restore the one per cent of the FAGs.”

Cr Firman said balancing increased council revenue with protecting ratepayers from rising rates was “certainly a balancing act” amid cost-of-living pressures.

“Our communities expect and deserve the services and facilities that our larger centres enjoy – we just want equity. We’re part of the community as well and whatever decisions we have to make, are ultimately in the best interest of our citizens.”

CMA Deputy Chairman Mayor Russell Fitzpatrick said special rate variations harmed the relationship councils had with ratepayers and it had become a necessity in NSW.

“Grants are over 70 per cent of the revenue of some rural NSW councils. Their rate base is stagnant. So, even rate hikes cannot help them much,” Cr Fitzpatrick said.

Cr Fitzpatrick said insufficient funding from the Australian Government hit country communities in the hip pocket.

“The inadequate FAGs situation creates large rate rises across rural and regional NSW local government areas during a cost-of-living crisis, as councils struggle to remain financially sustainable,” Cr Fitzpatrick said.

“While country councils know their communities are doing it tough, their operating costs have also risen much faster than their revenue over consecutive years.

Cr Firman said restoring FAGs funding to 1996 levels would significantly improve financial sustainability, not just for NSW councils but for local government across Australia.

If the Federal Government does not act, the CMA will consult with its members on the next steps.

“The status quo is unacceptable and unsustainable. We need FAGs funding restored to one per cent as a matter of urgency,” he said.