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1998/99 budget highlights: $1.2 billion assistance to Local Government



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M e d i a

R e l e a s e THE HON ALEX SOMLYAY MR Minister for Regional Development, Territories and Local Government

1998/99 BUDGET HIGHLIGHTS

$1.2 BILLION ASSISTANCE TO LOCAL GOVERNMENT

The Federal Minister for Local Government, Alex Somlyay, has announced that the estimated payment for 1998-99 local government financial assistance grants is $1.229 billion.

"The Government has decided to increase budget funding for 1998-99 by approximately 2 per cent of $£4 million.”

"Funding to local government through the financial assistance grants has increased by $69 million over the term of the Howard Government. This is a total increase of 6 per cent from the last Labor Budget in 1995-96.", Mr Somlyay said.

Each year, financial assistance grants to local government are adjusted in line with movements in the general revenue assistance which the Commonwealth provides to the States, consistent with the requirements of the Local Government (Financial Assistance) Act 1995. Further details are shown in the attachment.

Mr Somlyay said the Federal Government continues to be mindful of the importance of these grants to local government, particularly to rural and regional communities. "I anticipate that in 1998-99 funding to rural and regional Australia will be in the order of $800m or approximately two thirds of available funds", he said.

"We will continue to demonstrate our commitment to local government and work with them to improve efficiency and achieve other national priorities", Mr Somlyay said.

Ends 12 May 1998

Contact- Graeme Hallett (Minister’s office) 02 6277 7060

(B6) S46/98

Attachment

Local Government Financial Assistance Grants

Local Government Financial Assistance Grants

Payments3 $million General Purpose

Payments3 $million Local Roads

Payments3 $million Total Grants

1995-96 803.2 356.4 1,159.6

1996-97 842.5 373.9 1,216.4

1997-98 834.8 370.4 1,205.2

1998-99 851.1 377.7 1,228.8

a Payments include the estimated entitlement for the year plus adjustments for over or under payments

from the previous year.

The Federal Government provides untied financial assistance grants to all local governing bodies in Australia. These grants are made up of a ‘general purpose’ component, which aims to give all councils the capacity to provide an equitable level of local services, and a 'local roads’ component which is distributed according to road expenditure need.

Each year, financial assistance grants to local government are adjusted in line with movements in the general revenue assistance which the Commonwealth provides to the States, consistent with the requirements of the Local Government (Financial Assistance) Act 1995.

In 1998-99, the Commonwealth will pay local government $1,229 billion in financial assistance grants. This comprises two components:

• an estimated entitlement for 1998-99 of $1.239 billion. This is a rise by around 3.0 per cent or $35.9 million over the actual entitlement for 1997-98 and is in line with estimated movements in the CPI in 1998-99 and a population increase for Australia during 1997. This reflects a real per capita increase of general revenue

to the States, and .

• An expected over-payment of financial assistance grants to local government of around $10 million in 1997-98, reflecting lower than expected inflation in that • year.

In 1998-99 it is anticipated that funding to rural and regional Australia will continue to be in the order of $800m or about two thirds of available funds.

For 1999-2000 and subsequent years it is intended that financial assistance grants to local government will continue to reflect the real per capita indexation of general revenue assistance to the States.

Contact: Geof Watts 06 274 8144 Graeme Hallett 02 6277 7060