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$1.2 Billion shortfall in Labor's local Government promises

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M e d i a

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


The Local Government Minister, Alex Somlyay, has identified a staggering $1.2 billion funding shortfall, over three years, in Labor’s promises for local government.

“Labor has promised to continue the Coalition’s programme of annual financial assistance payments to local government, but at a massively reduced level," Mr Somlyay said.

Labor has also promised to continue the Coalition's Local Government Development Programme (currently funded at $5 million per year), but has not made provision for the programme in its table of costings. This represents yet another unfunded promise from Labor.

Labor’s policy document, released by its spokesman on local government, Belinda Neal, Labor’s candidate for the seat of Robertson, says that Labor will provide ‘grants of $890 million in 1999-2000 rising to $955 million in 2001-2002.’

“This is substantially less than the Coalition is already paying to local councils. This year the Coalition is paying more than $1.2 billion to councils and the Budget papers show that in future years this amount is set to grow to:

$1.23 billion in 1999/2000;

$1.33 billion in 2000/2001; and

$1.38 billion in 2001/2002.

There is a $1,227 billion difference over three years in the financial assistance that the Coalition is committed to paying and the lesser amount Labor is promising.

Financial assistance grants are essential for the operation of local government, representing around 80% of council revenues. Labor has some serious explaining to do:

• Why is Labor proposing to slash financial assistance to councils?

• How do Labor think councils will cope with a 30% reduction in their operating costs?

• Or is Labor proposing to abolish completely the highly valued local roads component of the annual financial assistance grants, which they do not promise to retain in their policy statement?

There are only two possible explanations for this state of affairs.


Either Labor is attempting to mislead councils with a shabby and deceitful cover-up of its intentions to slash the general purpose component of the annual financial assistance grants or completely abolish the local roads component of the grants.

Or are we witnessing another example of the Shadow Treasurer’s budgetary incompetence?

How can Australia trust as Treasurer a man who can neither read a set of Budget Papers nor cost future commitments?


11 September 1998

Contact: Graeme Hallett, Media Adviser 0419 218 469