Grant reform needed for financial security
Grant funding for local governments must be reformed if councils are to achieve financial sustainability, according to the Local Government Association of Queensland (LGAQ) and a review by KPMG and AEC Group.
The review, conducted in mid-2017, found the current model of grant-funding competitive, fragmented and costly.
The report states the existing model is failing to deliver the best financial outcome for people in the communities and undermines councils’ ability to plan the future, manage their assets and achieve financial sustainability.
The LGAQ’s vision for grant reform is to create genuine partnerships between state and local governments, based on the following recommendations:
- Consolidation of grant programs into a small number of program streams aligned to outcomes, with governance and oversight of each program stream comprising relevant State Government departments and the LGAQ.
- Grant program arrangements that provide funding certainty to councils, thereby supporting long-term planning, improved asset management and financial sustainability.
Goondiwindi Mayor Cr Graeme Scheu said the challenge with the current funding model was the uncertainty.
“It’s very hard for us to budget not knowing exactly what we can supply,” Cr Schue said.
“We know what our income from the rate base is and it’s nowhere near enough to advance our town.
“One of the reasons our council fully supports the Works for Queensland process is we’re far better off knowing exactly what we’re getting and when we’re getting it, rather than going into a contestable grant,” Cr Scheu said.
He said the Works for Queensland funding model allowed council to perform works that often couldn’t be funded solely by council’s budget.
“As a small council, we can’t survive without funding,” Cr Schue said.
“We didn’t use the funding on any one major facility. We utilised it on projects that didn’t make the cut.”
Toowoomba Mayor Cr Paul Antonio has seen major change during his time in local government and said the current funding arrangements were concerning.
“I don’t think we’re getting enough money,” Cr Antonio said.
Cr Antonio said there was a time local government would get a guaranteed subsidy on certain infrastructure without competing for funds.
“I don’t like the competitive nature of the funding; we’re all competing against each other,” Cr Antonio said.
“Local government needs certainty in funding and in 10 years I think we’ll be crying even louder for alternate sources of funding so that we can do the things that will make our community grow.
“Local government has a great responsibility; they’re the ones that build communities.
“The State Government really needs to get real about this.
Local Government Association of Queensland
LG House, 25 Evelyn Street, Newstead Qld 4006